The Slovenia Times

EU sees ageing as Slovenia's biggest long-term challenge


Over the short term, "Slovenia does not appear to face significant risks of fiscal stress arising from either the fiscal, or the macro-financial side of the economy," the report says.

Nevertheless, the share of non-performing loans in the banking sector "could represent a source of short-term contingent liability risks."

In the medium term Slovenia's public debt could pick up assuming there is no change in fiscal policy, to 81% of GDP by 2026, the report says.

Were fiscal policy to revert back to historical behaviour, the Slovenian debt ratio in 2026 would be as much as 7 percentage points higher, at more than 88% of GDP, than under baseline projections.

If, on the contrary, the structural balance converged towards the mid-term objective in line with the Stability and Growth Pact, public debt would decrease much more substantially, to around 57% of GDP in 2026.

In the long term, meanwhile, Slovenia is at high risk, primarily due to the "strong projected impact of the steep increase in the age-related public spending."

The risk is further compounded "by the unfavourable initial budgetary position."

The European Commission releases fiscal sustainability reports every three years, the emphasis always being on the consequences of ageing populations.


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