The Slovenia Times

FinMin Believes Changes Less Painful Than Feared

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Mramor held a series of talks in Washington, including with the new head of the International Monetary Fund (IMF) mission to Slovenia, Delia Velculescu.

Velculescu had previously headed the IMF mission to Cyprus, at a time when the island nation required an international bailout.

But Mramor was quick to point out that parallels should not be drawn. "Everyone understands that Slovenia is not Cyprus," he said.

Indeed, he claims the IMF has a positive view on the measures that successive Slovenian governments have adopted, including structural changes, the bank bailout and corporate deleveraging.

"They value that very much and see a relatively high probability that Slovenia will emerge from the crisis if it continues down this path," according to him.

However, Mramor also noted that Slovenia was living beyond its means, leading to unsustainable debt levels.

The debates in Washington thus touched on borrowing, but Mramor refused to delve into details beyond saying that Slovenia will tap financial markets at the most opportune time.

The IMF upgraded Slovenia's growth forecast this week, to 1.4% for both this year and next, but there are significant downside risks, in particular related to the performance of Slovenia's biggest trading partner, Germany, and the tensions in Ukraine.

"The most pessimistic estimates suggest that these factors could depress GDP growth by 0.7 percentage points," he said.

He said a lot would depend on Slovenia's economic policy. "If we manage to neutralize this cooling at least partially, we can be positive."

Senior IMF officials made repeated appeals this week for structural reforms across the world and, in Slovenia's case, the continuation of privatisation.

Mramor said he agreed with the reform appeal and reiterated that Slovenia would continue with privatisation.

"I believe the new government will not change course or act in opposition to decisions adopted by parliament," he said in reference to the list of 15 companies slated for privatisation that parliament adopted.

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