The Slovenia Times

Governor: IMF, World Bank noticed Slovenia's economic progress


Jazbec and Sodin said at the conclusion of the autumn sessions there had been a sense of relief about the progress of Slovenia, which had been among the critical states three years ago.

"It is a real relief to get a confirmation from an international point of view that the situation is Slovenia today is better than anyone expected. We need to build on this..." Jazbec said.

He highlighted sustainable economic growth and the need to tackle challenges related to developments in the world such as the consequences of Brexit, instability in certain eurozone countries and low prices of energy.

Sodin added that the Slovenian delegation had held several meetings with investors from both West and East Coast who own Slovenian bonds. "They recognise the lowering of risks and see that we have a good story," she said.

While three years ago, Slovenia virtually did not have any access to financial markets, now the markets know the country very well and acknowledge its achievements.

Jazbec's believes the government should be aware how much the situation has changed for Slovenia in the last three years.

"We were a country that was a topic of discussion, because we were at risk of needing a bailout. Today the talks were much more relaxed, because Slovenia has proven that it can change things, including with unpopular measures," Jazbec said.

Slovenia ranks in the upper third of eurozone countries in terms of the economic growth, banks have adequate liquidity and are ready to all potential shocks from stress tests.

Despite the relatively high share of bad loans in Slovenian banks, they meet all the financial stability criteria, the governor said, adding that this was not something all eurozone countries could say.

Sodin presented at the meetings the government's plans for the future outlined in the budget documents for 2017 and 2018. "The general government deficit will continue to decrease, public debt has also started to decrease after peaking last year," she said.

According to the government forecast, the public debt is to drop to 80.2% of GDP this year from last year's 83.2%, while it is to stand at 70.8% in 2020, when Slovenia's public finance should be structurally balanced.

The talks of financial officials in Washington focussed in the past few days on ways to encourage economic growth on the global level. They also touched on protectionism, especially during the election campaign in the US and before the results of a referendum on EU membership in the UK.

The IMF kept its global economic growth forecast for this year at 3.1%, the same as in the July forecast. Next year, the global economy is expected to expand by 3.4%.

In Slovenia, GDP is expected to grow at the same pace as last year (2.3%) and in 2017, the growth is to slow down to 1.8%, according to the IMF.

Jazbec said the main message of the meetings was that the world would continue to struggle with slow growth.

This is important from the central bank's point of view because it means that the monetary policy can only be more efficient if it is combine with other policies, he said.

"This is a call to the governments to continue with structural reforms and try to use the limited fiscal room given by the stability and growth pact," the governor said, adding that was especially important for countries which are at the periphery of the eurozone such as Slovenia.


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