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NATIONAL REFORM PROGRAMME

National reform programme 2017-2018

The National Reform Programme provides new basic guidelines and objectives for 2017 and 2018 to be pursued by the Government, while observing EU rules and limitations in trends in public finance and the broader macroeconomic environment. The document pursues the objectives of the Europe 2020 Strategy and the findings of the European Commission in the Country Report on Slovenia[1].

 

In 2016, Slovenia recorded 2.5% growth in GDP, which is more than was anticipated in the Spring Forecast for 2016, when growth was forecasted at 1.7%. The continuing economic recovery in the last four years seems sustainable and is reflected in stable employment, with 2% growth in employment in 2016, which is more than anticipated in the previous year’s documents.

 

Higher economic growth is to an extent also the result of past reforms and measures. Trust in the economy, triggered by the recapitalisation of banks, reforms and sustainable fiscal consolidation, have contributed to strengthening domestic demand. Likewise, most of the established macroeconomic imbalances also improved. The indebtedness of the corporate sector was reduced significantly. The improvement of the economic climate is also the result of changes in institutional arrangements after the crisis, including improved corporate bank management, which is to prevent the repetition of unsustainable lending by banks.

 

The key measures included the recapitalisation of banks and the transfer of non-performing bank assets to the Bank Asset Management Company, which enabled the restructuring of companies’ debts, significantly improved domestic and foreign trust in the Slovenian economy and changed the direction of gloomy GDP and employment forecasts. Sustainable and gradual fiscal consolidation also had an important impact on enhancing trust in the economy. Among the structural reforms, Slovenia also made major changes in the labour market, pensions and business environment. These reforms directly address the needs of the labour market, and their effects are visible over a longer period.

 

The key objectives for the next medium-term period will be further directed towards enhancing economic growth, and pursuing the objective of stable public finances and their sustainability in the long term. The measures are divided into three groups:

-       Long-term structural measures to provide sustainable public finance

-       Measures with a short-term structural effect

-       Measures to enhance growth potential