The Slovenia Times

Lower oil prices boosted disposable income, company profits


Foreign demand for Slovenian products increased, disposable household income improved and company profits rose, according to an analysis by IMAD, the government's macroeconomic forecaster.

While the trend was similar than in other oil importing countries, the Institute for Macroeconomic Analysis and Development (IMAD) notes that the effect in Slovenia was larger.

The share of gas, electricity, heating and vehicles in final household consumption is the highest in the EU (18.1% against the EU average of 11.2%).

What is more, energy prices last year dropped by 7.9% compared to the EU average of 5.6%, IMAD says in the latest edition of Economic Mirror.

The corporate sector meanwhile benefited from lower prices of inputs and higher purchasing power, which buttressed profits.

The low energy prices also improved the terms of trade, that is the ratio between import and export prices. IMAD estimates that from early 2015 until the third quarter of 2015 the more favourable terms of trade increased the trade surplus by EUR 400m.

Infrastructure Ministry data shows that retail prices of oil derivatives dropped by more than a tenth last year. The best-selling regular petrol was down 11.2%, diesel was almost 13% cheaper and the price of heating oil dropped by 16.2%.


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