On 13 February 2015 the International Monetary Fund (IMF) concluded consultations with Slovenia under Article IV of its articles of agreement. Slovenia is still suffering from the legacy of the financial crisis with high unemployment and output levels lower than before the financial crisis.
Economic growth in Slovenia is estimated at 1.9% in 2015 and 1.7% in 2016. The main policy challenges include strengthening the banking sector; going ahead with corporate restructuring and reducing the role of the state in the economy; putting public finances back on track; and boosting growth through structural reform. Reducing the non-performing loans is a priority and bank governance must be strengthened.
The IMF welcomes efforts by Slovenia at fiscal consolidation aimed at controlling the budget deficit. The IMF officials would prefer a more ambitious structural reform so that the level of debt begins to go down soon. The IMF has emphasized the importance of pension reform because of the challenge of the aging population. It is also urging tax reform that should include a reform of the property tax system. A redesigned real estate tax could ensure an adequate sharing of the tax burden based on wealth. Broader tax reforms could help to stop the erosion of the tax base, for example by reviewing the tax exemptions currently given. More efficiency is also required in government spending. Reforms to improve the business environment should include efforts to cut red tape and encourage domestic and foreign investment.
