This is the first Stability Programme that Slovenia has had to draft after it received the final green light on 11 July to join the eurozone on 1 January 2007
The government on Thursday, 7 December adopted the Stability Programme 2006-2009 which explains how Slovenia will meet the conditions of the eurozone Stability and Growth Pact. "Things in Slovenia are going better than we expected a year ago," Finance Minister Andrej Bajuk told the press.
This is the first Stability Programme that Slovenia has had to draft after it received the final green light on 11 July to join the eurozone on 1 January 2007.
The document defines economic policy measures until 2009 taking into account the latest forecasts by the Institute for Macroeconomic Analysis and Development, the government think-tank.
According to projections, employment will increase and the Labour Force Survey unemployment will go down, Bajuk said.
The budget deficit is to drop to 1% of GDP in 2009 and the general government debt hover around 28% of GDP.
By the end of 2006 indebtedness is projected to reach 28.5% of GDP, which Bajuk said was far from the Maastricht criterion of 60% of GDP.
The government took full account of the effects of tax reform and the projected increase in rail infrastructure investments, Bajuk said.
Growth projections until 2013 suggest that the Slovenian economy will expand by about 4% a year in the absence of additional measures or economic policies.
"If we are ambitious in implementing new reforms, we can however expect growth to the tune of 5.3%," Bajuk said.
Bajuk also noted that the sustainability of the pension and health systems is guaranteed until 2020, but this is no longer true after 2050.
He said certain measures will have to be taken and youth of today can expect to work longer than their parents. "The fact is that there are not enough young people so we must tackle these issues immediately."
Bajuk added that Slovenia will have "very serious problems" if it does nothing. The sooner things get done, the less it will hurt.
Yet Bajuk also added that the government was not drafting any laws that would raise the retirement age.
Source: Slovenian Press Agency STA
Author: STA, Slovenian National Press Agency