STA, 11 February 2021 - In its winter economic forecast, the European Commission has downgraded Slovenia's gross domestic product (GDP) forecast for this year from 5.1% to 4.7%, while a rebound of 5.2% is expected in 2022, an upgrade from the 3.8% in its previous outlook.

The Commission has also estimated Slovenia's GDP to have contracted by 6.2% last year, which is an upgrade of 0.9 of a percentage point compared to the autumn forecast.

The winter forecast report, released on Thursday, says that the "recovery in the third quarter of last year, however, was followed by a strong resurgence in COVID-19 infections and the introduction of new restrictions in the fourth quarter."

This dampened economic sentiment and reduced private consumption significantly, but the impact was softened by extensive measures to support employment and limit insolvencies. Still, the unemployment rate increased slightly.

The European Commission expects that the economic situation in Slovenia will gradually improve as more people are vaccinated and restrictions are relaxed, leading to stronger growth in the second half of the year.

Overall, GDP is forecast to grow by 4.7% this year supported by both strong domestic demand and positive net exports. The economy is expected to grow by 5.2% in 2022, driven by the same factors as in 2021.

"GDP is expected to exceed its end-2019 level by the end of 2022," the report for Slovenia adds.

The Commission assessed that, once support measures end, the recent increase in the minimum wage could place additional strain on struggling companies in the services sector, which constitutes a downside risk to the forecast.

When it comes to inflation, it noted that the sharp decline in energy prices in March 2020 had led to deflationary pressures that were still being felt at the end of 2020 despite the partial recovery in energy prices.

Inflation is expected to remain very low in the beginning of 2021 and to increase somewhat in the second half of the year.

"Overall, prices are expected to increase by 0.8% in 2021, and in 2022 inflation is expected to reach 1.7%," the report concludes.

STA, 5 February 2021 - Economy Minister Zdravko Počivalšek announced additional relaxations of Covid restrictions in business on the sidelines of his visit to Podlehnik in the north-east on Friday. Stores and repair shops up to 400 square metres will reopen next week, provided that staff get tested for coronavirus weekly, he said.

The minister is pleased to see recent relaxations, including in schools. Precautionary measures are still crucial though, he warned.

The decision makers made the decision on further easing of restrictions in retail and services sector on Thursday evening after a meeting with business representatives.

Počivalšek said he would like to see a gradual return to normal to continue, however he warned that the situation could quickly turn for the worse if people were not responsible.

The cost of rapid tests that will be used in mass testing among staff will be covered by the state, he added.

Branko Meh, the head of Chamber of Trade Crafts and Small Business (OZS), told the STA on Thursday evening that most business activities would reopen next week under the condition that staff is tested for coronavirus at least once a week. He said that business representatives were pleased with the deal.

The relevant decree is expected to be published by the end of Friday and enter into force on Saturday, meaning that businesses which comply with new requirements would be allowed to open immediately.

Economy Ministry State Secretary Ajda Cuderman told the press Friday evening that some of the businesses which are currently open will henceforth have to test their employees on a weekly basis, including grocery shops, effective from 12 February.

For some types of businesses that will now be newly open, both providers and customers will have to be tested. Cuderman mentioned this requirement for establishments including tutoring, pet salons and real estate agencies.

STA, 5 February 2021 - The Swedish furniture group Ikea will be launching its online store for Slovenia on 25 February. If coronavirus restrictions will allow, its new brick-and-mortar store in Ljubljana will also open on the same day, the company said in a press release on Friday.

The online store will be accessible as of Tuesday at www.ikea.si, allowing buyers to browse, while purchases will be possible as of 25 February. A pick-up point will also open in Maribor on the same day.

Ikea said in the press release that its operations would be conducted in line with the company's strict protective measures, as well as government orders and recommendations.

Measures will include obligatory masks, body temperature screening, frequent disinfection of premises and keeping of safe distance, the company said.

Ikea initially planned to open the new store at the end of 2020, but then postponed the opening due to the epidemic. The first Ikea store in Slovenia is 31,000 square metres big and will be selling some 9,500 items.

https://english.sta.si/2863355/parliament-passes-eight-stimulus-law-worth-eur-320-million

STA, 3 February 2021 - Parliament passed in the early hours of Wednesday the eighth economic stimulus law that is to deliver boosts, worth around EUR 320 million, to mitigate the impact of the epidemic. The key measures are state shouldering of the minimum wage rise, the extension of the furlough scheme and introduction of fines for vaccine queue-jumping.

The furlough scheme, which has been in place since last spring, will be extended until the end of April, with the option of another two one-month extensions.

The measure, which has been well received by employers and has had a positive effect on the labour market, according to Labour Minister Janez Cigler Kralj, may be used by employers registered by 31 December 2020 whose revenue this year is estimated to drop by more than 20% year-on-year due to the epidemic.

The novelty in the furlough scheme is the state covering not only 80% but 100% of the wages in companies which are closed due to government-imposed restrictions.

The minimum wage increased this month to EUR 1,024 in gross terms. As companies are already struggling as it is, the government decided to temporarily cover part of the cost of the rise.

In line with the eighth relief package, a subsidy of EUR 50 per minimum wage worker is envisioned for the first half of the year, while in the second half, employers will be exempt from paying a part of social security contributions for their workers.

The opposition Left warned during the debate in parliament that the former would promote paying out low wages since those who would pay higher wages would not get anything.

The SocDems (SD) and Alenka Bratušek Party (SAB) meanwhile proposed shouldering part of the cost only for those employers who are struggling due to the rise.

Both amendments were turned down by MPs.

In July, the minimum base for social security contributions will be temporarily lowered until the end of the year from 60% of average wage to the minimum wage amount.

The parliamentary Labour Committee proposed an amendment on Monday that the difference would be covered by budget funds to ensure that the workers in question would not be later deprived when it comes to their pension payments.

The proposal was thrown out though at the initiative of the coalition.

Moreover, the lowered base will be in place only for workers who are in employment relationships and not also for the self-employed. "This means unequal treatment," warned Andreja Zabret of the Marjan Šarec List (LMŠ).

The law also sets down that employers will not be permitted to make any redundancies for business reasons during the period of receiving the minimum wage rise subsidy and also three months afterwards.

The package expands the groups eligible for a one-off allowance to include secondary schools students aged 18 or more (EUR 50) and university students studying abroad (EUR 150), as well as some disabled workers and war veterans (EUR 150). Those who became unemployed after 12 March 2020 will also receive EUR 150.

The crisis bonus, worth EUR 200, will be paid out to employees who did not get it with their December pay because they received a performance bonus.

During the discussion, the opposition was again critical of what it saw as "cuckoos" inserted in the package, referring to measures that do not mitigate the ramifications caused by Covid-19, according to opposition MPs.

They pointed to a fine for legal persons who would act in violation of programmes for preventing, containing and rooting out infectious diseases or programmes that are related to the vaccine rollout.

Mojca Žnidaršič of the coalition Modern Centre Party (SMC) said that this would enable sanctioning violations regarding vaccine distribution, such as vaccine queue-jumping, whereas Dejan Židan of the SD raised the possibility the measure would be challenged with a constitutional review.

The labour minister meanwhile highlighted measures that aim to help the elderly. Those who have recovered from Covid-19 and need more hospital treatment after the illness and those who cannot be discharged home will be eligible to prolonged treatment and care, including physical and work therapy.

The Red Cross and Slovenian Caritas will also receive additional funds, whereas religious workers will get their social security contributions temporarily covered by the state.

The short-time work scheme could be used also by farmers who employ workers. Aid provided to passenger transport services has also been extended.

A provision setting down that all employers could use up to three days of medical leave without contacting their GP has been extended until the end of 2021. The measure was introduced by the fifth stimulus package, passed in October 2020.

An amendment sponsored by the Left to temporary remove a provision saying that the government must okay the call for applications to enrol in university courses has been scrapped. "I hope that is not the beginning of the end of public education," said Lidija Divjak Mirnik of the LMŠ.

A total of 51 MPs from the ranks of the SDS, New Slovenia (NSi), Modern Centre Party (SMC), Pensioners' Party (DeSUS), National Party (SNS) and two minority MPs endorsed the package, whereas the Left and one MP of each the LMŠ and SD were against it. The rest of the opposition MPs abstained.

During the discussion, the opposition said that the measures were too little too late, ineffective and did not include all the vulnerable groups. Moreover, dialogue with social partners has been non-existent, warned the opposition.

Meanwhile, the coalition said the measures had been upgraded and would continue to significantly mitigate the impact of the epidemic.

"The eight coronavirus package is urgent and effective," Matej Lahovnik, the economist heading the taskforce preparing the mitigation measures, said at Tuesday's government briefing.

He noted that the government would shoulder the cost of two-thirds of the minimum wage rise for the first six months of the year.

"The minimum wage law is bad, but it's been passed and is valid," he said, adding the subsidy was the most the government could do for employers with respect to the matter in the given moment.

He also suggested it was now time to start thinking about an exit strategy. "Our view is that the second half of the year will be marked by a strong recovery. The epidemiological situation will definitely get much better as early as spring, which will allow a reopening of the services," he said.

"The money will then start circulating again, which will bring about a revival of the activities that have been closed the longest," he added.

He believes government departments should draw up targeted public calls for applications to revive economic activities, which should allow for an efficient recovery. He mentioned a couple of already prepared or emerging boost schemes by the state-run export and development bank SID and the SPIRIT investment agency.

STA, 28 January 2021 - The Novo Mesto-based pharmaceutical group Krka generated EUR 1.53 billion in revenue last year, up 3% compared to 2019, while net profit has been estimated at EUR 286.6 million, up 17% year-on-year, show the unaudited preliminary results released on Thursday.

CEO Jože Colarič said in the report that, despite the Covid-19 pandemic, Krka had managed to ensure uninterrupted operations, and provide supplies of pharmaceutical products in markets at all times.

Colarič noted that even though the pandemic had hindered marketing-and-sales activities, the Krka group recorded "best sales results ever".

Net profit, estimated at over EUR 286 million, is also the highest so far, as the group obtained marketing authorisations for 20 new medicinal products, including the first one in China.

The core company increased sales of goods and services by 4% to EUR 1.45 billion, and net profit was also up by 4% to EUR 258.4 million, the report shows.

It also adds that last year, the Krka group's overall investments amounted to almost EUR 230 million, including EUR 151.8 million of 10% of sales in 2020 for research and development.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 30% year-on-year to almost half a billion euros, while EBITDA margin reached 32.5%, up almost seven percentage points compared to 2019.

Product and service sales were up in all regions except Slovenia (-8%) and the overseas markets (-6%). Sales increased the most in East Europe, by 7% to EUR 517.2 million, followed by South-East Europe (+4% to EUR 199.4 million.)

East Europe accounted for 33.8% of total sales of the Krka group as the largest region in these terms, followed by Central Europe and West Europe with a 22.3% share each. Sales in Slovenia accounted for 5.6% of total sales.

In Slovenia, sales of products were up by 5%, while revenue from spa and tourism services was down by 25%, mostly due to the restrictive measures related to the epidemic, said Colarič.

Russia was the largest single market with EUR 326.9 million in sales, up 5% year-on-year. Expressed in the Russian ruble, the growth on the market was 17%.

In Ukraine, sales were up by 8% to EUR 86 million, and in Poland, the leading market for Krka in Central Europe, sales were up by 2% to EUR 163 million.

Sales of prescription pharmaceuticals amounted to EUR 1.3 billion at the group level, 4% more than in 2019, accounting for 85% of total product and service sales. All regions except the overseas markets saw sales growth and volume sales were up by 7%.

Colarič noted that the price of Krka share on the Ljubljana Stock Exchange had increased by 25% last year to reach EUR 91.40 at the end of December, with its market capitalisation standing at EUR 3 billion.

As for the plans for 2021, he said that sales were expected to reach EUR 1.53 billion and net profit EUR 265 million. Investments, mostly in the expansion and modernisation of production and infrastructure, are planned at EUR 114 million.

The group plans to increase the total number of employees by 1% in 2021, so the number of full-time employees is expected to exceed 12,000 by the end of the year.

The sick leave rate in the parent company in Slovenia did not increase significantly last year despite the epidemic, as it was up by 0.2 of a percentage point to 6.4%. Only 0.4% of total sick leave was related to Covid-19.

Colarič noted that the supervisory board had appointed him the CEO for the 2022-2027 term and had given him the mandate to form a new management board for that term. The appointment of the remaining board members is planned for November.

"In the second half of the year, we intend to review the five-year strategy and upgrade the goals. During the new term, we will lead Krka by following the course of an internationally established and innovative generic pharmaceutical company," he said.

STA, 27 January 2021 - United Media, the media division of United Group, plans to expand to the Slovenian market this year by setting up a news portal under the N1 brand, which is already active in the region.

The Luxembourg-based United Media has already opened the Adria News subsidiary in Ljubljana under which the N1 Slovenija web portal will operate.

The portal is to be launched in the first half of this year. According to unofficial information obtained by the newspaper Finance it will kick off in spring.

N1 has established itself as a trust-worthy and independent media platform as well as number one pick by consumers in all the markets where it is present and N1 Slovenija aims to do the same in the Slovenian market by meeting the highest journalism standards, said United Media managing director Aleksandra Subotić in a press release issued on Wednesday.

Katja Šeruga has been appointed Adria News director as well as the portal's editor-in-chief. She previously worked as a journalist at public broadcaster RTV Slovenija and commercial broadcaster POP TV. She was also the newspaper Večer's editor-in-chief and editor of the commercial broadcaster Kanal A news programme Svet.

The portal will seek to boost and elevate journalism in Slovenia, she said today. N1 Slovenija will cooperate with N1 international editorial department that features among others former BBC World Service director Peter Horrocks and ENEX managing director Adrian Wells.

United Media is not planning on setting up the N1 TV channel platform in Slovenia for now, Finance reported yesterday.

United Group, whose majority share was acquired by British fund BC Partners in 2019, already owns telecommunications provider Telemach, online shopping portal Shoppster and sports channels Sport Klub in Slovenia.

Some 25% stake has been reportedly retained by Serbian businessman Dragan Šolak, the founder of United Group. N1 news channels are currently present in Serbia, Croatia and Bosnia-Herzegovina. N1 is the leading news media platform and CNN's partner in the region, reads the press release.

Meanwhile, Finance reported that five groups are interested in the takeover of telecoms incumbent Telekom Slovenije's subsidiary TS Media based on unofficial sources - one of Šolak's companies, Austrian publishing group Styria, one of businessman Martin Odlazek's groups, Hungarian TV2 and publishing company Adria Media.

Telekom Slovenije published a call for expressions of interest in a 100% stake in TS Media in November last year. The subsidiary's portfolio includes the news portal Siol.net, the search engine and web portal Najdi.si and the business news and assistance portal Bizi.si.

The state-owned telco would prefer to sell the entire stake but is also willing to consider selling TS Media's assets individually.

STA, 27 January 2021 - Revenue in retail in real terms in Slovenia was down last year by 9.7% compared to 2019, the Statistics Office reported on Wednesday. The largest drop, by 23.6%, was recorded by shops specialised in sale of motor fuels.

The Statistics Office noted that, after four months of decline on the monthly level, revenue in retail in real terms last December was up by 0.1% compared to the month before.

In December alone, revenue in retail was up by 0.8% compared to November, excluding motor fuel sales. In shops specialised in sale of motor fuels, revenue was up by 0.5% on the monthly level.

Revenue from retail sales of non-food products was up by 0.2% in December on the monthly basis, and revenue from retail sales of food was up by 0.3%.

Year-on-year, revenue in retail in real terms in December was down by 13.3% when sales of motor fuels are included. Without these sales, revenue in retail last month was down 8.6% year-on-year.

Compared to December 2019, revenue from retail sales of non-food products was down by 16.1%, while revenue from retail sales of food was up by 1.4%.

More on this data

STA, 19 January 2021 - Labour Minister Janez Cigler Kralj has announced after meeting social partners on Tuesday that he will set the minimum wage for 2021 at EUR 1,024 gross. This is 120% of the minimum cost of living and the lowest possible rise under minimum wage legislation. Last year, the minimum wage stood at EUR 941 gross. 

The minister said the government intended to partly cover the raise for employers until the end of June with the option of a six-month extension.

The next anti-corona economic stimulus bill will thus bring a provision to lower the lowest base for social contributions from 60% of the average salary to the sum corresponding to the minimum wage. In this way the state would pay some 40% of the raise, Cigler Kralj explained at a news conference in Brdo pri Kranju.

This will be the second most important measure in the eighth economic stimulus bill, which will also bring an extension of the furlough subsidy scheme and some new measures to preserve jobs during the epidemic.

A new formula to calculate the minimum wage kicked in as of 2021 in line with the 2018 changes to the minimum wage act.

It says the minimum wage must be at least 20% but not more than 40% above the minimum cost of living.

The last time the minimum cost of living was calculated was in 2017, at EUR 613 for a single person. It will be next calculated in 2023.

This is what particularly bothers the trade unions, with Pergam head Jakob Počivavšek saying the raise does not take into account all the price increases since 2017.

Although some employers insisted on freezing the raise even at today's meeting with the minister, they now welcomed his opting for the lowest possible rise.

The director of the OZS small business chamber, Danijel Lamperger, told the STA he expected the state to keep the word about subsidising the raise.

Počivavšek meanwhile criticized Cigler Kralj for having decided how much to raise the minimum wage before meeting the social partners, saying he had announced the sum at the start of the meeting.

The ZSSS confederation said last week it hoped for almost the highest possible raise, which means the minimum wage would amount to some EUR 847 net.

The minimum wage for each year must be set by the labour minister after consulting social partners, and the sum must be published in the Official Gazette by 31 January.

Employer organisations were against the changes to the minimum wage act before they were being passed in late 2018, arguing many companies could not afford to raise wages.

During the corona crisis last year they wanted to persuade the government to freeze or delay the January 2021 raise, but the trade unions were strongly against.

The government came up with a compromise, proposing to delay the new formula until 1 April, with the government covering the raise until September.

Since both the employers and trade unions opposed it, the proposal did not make it to the last anti-corona economic stimulus law.

Statistics Office data shows that the average monthly gross pay in Slovenia in 2019 was EUR 1,754.

STA, 17 January 2020 - The financial position of Slovenian households continues to improve as their assets had increased more than debt until the end of the third quarter of 2020. The surplus of assets over debt stood at EUR 45.2 billion, a rise by EUR 3.9 billion at the annual level, the central bank's report shows.

At the end of last year's third quarter, Slovenia's households reported assets of some EUR 60 billion, an increase of EUR 4.1 billion year-on-year.

Bank deposits increased by EUR 2.1 billion to EUR 24.1 billion, 90% of them were made at domestic banks and 73% of them were sight deposits.

Cash claims totalled EUR 5 billion, whereas insurance or pension scheme claims stood at EUR 8.1 billion. Equity investments were also on the rise, amounting to EUR 18.2 billion.

Household liabilities rose by EUR 198 million to EUR 14.8 billion. Accounting for the bulk of the liabilities, loans increased by EUR 186 million to EUR 13 billion. They were mostly taken out at banks (84%).

When it came to the situation of companies or non-financial corporations at the end of the 2020 third quarter, the deficit of assets over debt grew by EUR 130 million year-on-year to EUR 39.3 billion.

Companies held assets worth EUR 50.2 billion, up by EUR 1.1 billion year-on-year. Investments in equity grew by EUR 712 million to EUR 17.7 billion.

Liabilities meanwhile stood at EUR 89.5 billion, up by EUR 1.2 billion. A quarter of them were loans (EUR 22.3 billion), down by EUR 631 million. Some 41% of them were arranged at banks and 29% abroad.

STA, 11 January 2020 - The port operator Luka Koper generated EUR 206 million in net sales revenue in 2020, which is 8% less than in 2019. Cargo transshipment was down by 14% to 19.5 million tonnes, shows the company's preliminary and unaudited report, published on Monday.

"The reason for revenue dropping at a smaller rate than transshipment is better operations in additional services, filling and emptying of containers and in higher revenue from storage charge in certain segments," the company said.

The operator of Slovenia's sole maritime port in Koper added that it had felt the impact of the coronavirus pandemic, but that transshipment of containers as a strategic group of goods had nevertheless remained stable.

Transshipment of general cargo was down by 26% to 954,807 tonnes, of containers by 2% to 9.27 million tonnes, of cars by 10% to 998,201 tonnes, of liquid cargo by 23% to 3.32 million tonnes and of bulk cargo by 25% to 19.52 million tonnes.

A total of 945,007 container units were transshipped in Koper last year, which is 1% less than in 2019, and the number of transshipped cars dropped by 13% to 617,157.

The impact of the pandemic is direct when it comes to liquid cargo, as the sales of petroleum products dropped, in particular in the aviation industry, the company said.

It added that the drop in car production had affected the entire supply chain, and that it showed in transshipment of general cargo, including steel products, and in the terminal for bulk cargo, where raw material for steel industry is transshipped.

A part of the decline in transshipment of bulk cargo is attributed to the general drop in the use of thermal coal as a consequence of the increasing taxes on greenhouse gas emissions.

In car transshipment, a positive trend was recorded in the second half of 2020 on the account of exports of cars to the Far East, which is why the drop was much smaller than in other comparable European ports, Luka Koper said.