• Velimir Bole
  • Jože Mencinger
  • Franjo Štiblar
  • Robert Volčjak


Gospodarska gibanja 449

Expected demand continued declining. Yearly increase of domestic demand was caused by low base a year ago rather than increased dynamics. After a modest break a decline of investments speeded up. Export demand, particularly on the EU markets, keeps on diminishing while strengthening on the non EU markets. After drastic fall in 2009 and three years of continued growth which brought the level beyond the level in 2007, foreign trade began stagnating in the middle of 2012. Trade with EU member countries is decreasing, trade with non EU countries is increasing. The deficit remains stable while surplus in trade with non member countries is growing. Business climate in August worsened due to lower confidence in manufacturing, services and retail trade. Business climate in the whole EU is considerably below business climate a year ago; it worsened in most economic activities, particularly in manufacturing.

Monthly fluctuations of industrial production close to stagnation have been shaped by seasonal and random movements which change direction from month to month. Monthly jumps up and down in EU countries also do not provide proper information on longer run trends; they change from month to month. Contraction in construction and most transportation branches, air traffic in particular, continued. Situation on the labor market improved slightly. Number of jobseekers decreased; however, a large share of those leaving employment offices did not get jobs; they joined non active population. Unemployment rate in EU27, particularly in the euro zone, is on the rise, number of unemployed exceeded 25 millions.

In August, retail sale prices increased; the dynamics of harmonized cost of living index in Slovenia became faster than in the euro zone. The producers prices did not change; they are shaped by decreased domestic demand. Price expectations however point to a decline of prices in the future. Raw material prices increased only slightly in August while yearly change declined, except for food and oil. Average wages decreased in nearly all segments of the economy. Despite that, labor costs per working hour increased; the key reason being even faster cutback of working hours.

The decrease of public revenues slowed down; the revenues of indirect taxes increased strongly and longer run dynamics strengthened as well. Domestic taxes on goods and services fell in August but they were considerably larger than in the comparative period a year ago; excise taxes contributed the lions share. Credits to non financial corporations continued to shrink rapidly and long run dynamics of credits to households decreased as well. Deposits increased in July, while longer run dynamics suddenly diminished. Euribor decreased slightly, while interest rate for new businesses in euro zone increased. In Slovenia, the deposit interest rates have not changed, while credit rates decreased. Surplus in the current account has been growing from month to month; the data are spoiled only by rather large statistical error. Current account surplus is a product of lower deficit in balance of trade and larger surplus in the balance of services; this is accompanied by larger deficit on the income account and smaller surplus on the account of current transfers. The changes and the structure of the financial account point to slow reduction of foreign indebtedness.

Full article is available in Slovenian language.

Only a part of the articles in the publication Gospodarska gibanja (Economic Trends) is written in the English language. Please visit the Slovenian web page.


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