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Slovenia Business Week no. 29/2004: Fitch Says Slovenia Could Introduce the Euro in Early 2007

The country's outlook remains positive and, thanks to efficient economic policies, reflects a credible chance for early membership of the EMU

Slovenia could introduce the euro at the beginning of 2007, as lowered inflation has contributed to the country's progress in meeting convergence criteria, according to a report released by the international credit rating agency Fitch Ratings.
The country's outlook remains positive and, thanks to efficient economic policies, reflects a credible chance for early membership of the EMU, the agency points out.
Slovenia's balance of payments current account has recorded minor surpluses in the recent years and public finances are sound.
The general government deficit has never exceeded 3 percent of the GDP, while public debt stood at between 26 and 27 percent of the GDP, less than half of the average in the EU, notes Fitch.
The only problem is inflation, yet is seems that it is approaching 3 percent and is within reach of the 2.5-percent target which will probably be necessary for Slovenia to join the EMU in early 2007, according to the report.
The agency believes early membership of the EMU will reinforce the country's already strong external position.
Fitch also lists some disappointments, most notably the small scale of privatisation and foreign direct investment, although both are a result of historical and social reasons.
Fitch's optimistic report also reflects on an improved credit rating for Slovenia: long-term foreign currency rating has been raised to 'AA-' from 'A+', "in reflection of the increasing certainty and proximity of its adoption of the euro".
In addition, the country ceiling has been raised a notch to 'AA+'.

Author: Branka Murn