The Slovenia Times

Bertoncelj: Structural reforms key for Slovenia


"Slovenians need strategic goals with which we could identify. Let's set ourselves some higher goals and try to reach them. We need a pact for development breakthrough."

Although some say another recession is around the corner, Bertoncelj is optimistic because forecasts for Slovenia are good. "I'm glad this is a good year and that prospects for next year are also solid."

He said the figures for January to April showed the country had balanced public finances, with the gap currently at less than EUR 10 million.

This is in line with the plans and the estimated budget surplus of 0.8% of GDP for this year, he said, adding Slovenia was also deleveraging successfully.

Bertoncelj is thus not afraid of the Constitutional Court's review of the 2019 national budget, which has recently been filed by the two opposition parties.

But he also said these figures were still only estimates, a kind of "a moving target", whereas "the actual situation will only be known in two to three years when all the data are final".

The minister touched on taxes, saying a proposal is being studied to raise the base rate for a capital gains tax from 25% to 30%, but added it would drop to zero in 20 years' time as set down already at present.

Outlining the situation on global markets, Egon Zakrajšek from the US Federal Reserve said indicators in the US showed the almost 60% likelihood of recession.

"Although economists are unwilling to forecast it, it will happen, the only question is when," said Zakrajšek, who is leaving the Fed for the Bank for International Settlements.

Recession could be triggered by an unexpected credit event, since the world economy is rated indebted, or an escalation in the trade war, he said.

What also worries him is a possibility of a trade war between the US and Europe, given that both economies are cooling down.

China too could trigger the recession, as its surplus on the trade balance sheet will sooner or later turn into a deficit, so the country will be forced to sell enormous sums of dollar reserves, said Zakrajšek.

He also pointed to the US central bank's loss of credibility as a potential trigger.

Asked whether US President Donald Trump could win another term, he said this was very likely, since there was no person on the horizon that would be able to overcome the rather strong political polarisation in America.

The Financial Conference, organised by the business newspaper Finance and the Ljubljana Stock Exchange, focuses on global and European challenges.


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