Press release from the meeting of the Governing Board of the Bank of Slovenia on 1 March 2011
1) The Governing Board of the Bank of Slovenia discussed current economic and financial developments, and approved the publication of the Report on Economic and Financial Development for February 2011, and the Report on Slovenia’s Economic Relations with the Rest of the World for December 2010.
Growth was relatively high in the final quarter of 2010, and averaged 1.2% in 2010, in line with the Bank of Slovenia's projections. The main factors in the aforementioned growth were foreign demand and the renewal of inventories.
Developments on the labour market remain unfavourable: the number of unemployed rose sharply in December 2010 and January 2011, while the workforce in employment in the majority of major branches of the private sector continues to contract. Surveys indicate a poor outlook for the next several months. In such conditions, and in the context of rising cost factors in the international environment, growth in labour costs in relation to labour productivity must be controlled.
February's fall in inflation was merely temporary in nature owing to certain one-off effects. High growth in the prices of commodities, particularly in oil prices, could have a significant impact on the inflation trend in the coming months. A simultaneous rise in the prices of certain services in sectors with limited competition (e.g. railways, post office, supplementary health insurance and nursing home care) could have an adverse effect on inflationary expectations and the emergence of second-round effects on growth in prices and wages.
2) The Governing Board of the Bank of Slovenia discussed the current operations of banks, developments on the capital markets and developments in the area of interest rates.
3) The Governing Board of the Bank of Slovenia discussed the report on the operations of payment systems for the fourth quarter of 2010.