In its commentary targetting the restrictions that took effect on 1 November, the GZS challenges the central bank's concerns about a rapid growth in consumer loans and household debt.

Admitting that consumer loans had risen by 50% since 2015, the GZS said that throughout the economic cycle the percentage of all bank loans to households stayed more or less unchanged at 23% of GDP.

Looking at the overall household debt, including lease purchases and lenders other than banks, as proportion of GDP, the debt of Slovenian households increased by 27% last year.

The GZS compares this to the average growth of 53% in the EU or roughly 45% in the central European countries (Czech Republic, Germany, Austria).

"Based on these objective data, it is possible to conclude that Slovenia's household debt is only half the EU average," GZS said, adding that households were never risk clients for Slovenian banks.

"The population is falling more than 90 days behind on repayment of only 1.8% of the loans. The proportion in the entire economic cycle never surpassed 5%, not even when the survey unemployment rate exceeded 5%."

Considering the household debt to disposable income ratio, an average European household can repay its debt with its annual revenue, while an average Slovenian household can repay it in less than half a year, the GZS said.

The GZS finds Banka Slovenija's restrictions problematic because they do not take into consideration the uneven dynamics of lending activity, and measures related to the statutory minimum wage and dependants.

The GZS notes that with the statutory minimum wage rising by more than 6% in 2020, "the number of those who are uncreditworthy will increase further despite their higher net incomes".

Under the new rules imposed by the central bank, banks will for the most part have to keep loan-to-value ratios (loan payments relative to the client's annual income) to below 50% for clients with monthly income of up to twice the gross minimum wage and below 67% for those making more than that.

Households with children are subject to additional restrictions since the central bank rule stipulates that a certain monthly allowance needs to be left over for each child.

The GZS also notes that growth in the retail sector had already slowed down significantly with retail revenue, excluding motor fuels, increasing by 1.3% in real terms in September, down from 4.1% in the first nine months of the year.

Noting that private consumption represents 52% of Slovenia's GDP, the GZS said its estimates showed the "debt brake will reduce nominal economic growth by about EUR 90 million at the annual level, which reflects those consumers who will not be looking for alternatives in other types of loans".