The OECD's Going for Growth 2013 report, published on Friday, notes that Slovenia has shown some more reform dynamics by passing a pension reform at the end of 2012, but adds that progress is still slow, especially as regards privatisation of state-owned companies, including banks.

The pension reform should be more thorough, according to the OECD, it should increase the retirement age more, limit more strictly the right to early retirement, stimulate longer employment more and give inflation more weight in adjustments of pensions.

The organisation has been urging Slovenia for several years already to reduce public ownership and control of enterprises, which it believes is hampering productivity and foreign direct investment inflows.

Some progress is seen in the establishment of a Slovenia Sovereign Holding, but the report notes that it still faces some challenges.

In this respect, the OECD recommends that Slovenia devise a rigorous and transparent regime for determining which state assets should remain in public hands and ensure autonomy of the board and management of the holding.

Coupled with improvements in tertiary educational outcomes, the organisation believes privatisation would help boost labour productivity, which is deemed the key factor in the GDP-per-capita gap growing compared to the upper half of OECD countries since 2008.

Another step towards more productivity, according to the OECD, would be a more flexible labour legislation, reducing job protection on regular employment to narrow the differences in contract provisions, which should help improve labour market inclusion of younger and low-skilled workers, thereby reducing inequality.

Although a labour market reform is in the legislative process, the OECD sees no major progress in the field.

The OECD called for phasing out the preferential tax and regulatory treatment of student work.

To improve tertiary education outcomes, the OECD proposes an introduction of tuition fees in public higher education institutions, along with student loans with income-contingent repayment, and tying access to student benefits to adequate progress in studies.

The report notes that Slovenia's statutory minimum wage relative to the median wage was high according to OECD standards.

Despite the overall 3% cut in net public sector wages, the OECD calls for a new social agreement introducing wage moderation and for ensuring that the minimum wage rises no faster than inflation for a while.