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Sunday, December 3, 2023

The Situation Does Not Look Good in the Long Run

Even the Fiscal Council fell silent. Its last serious warning came at the end of September. The situation on global markets is cooling down and as a result companies are already facing lower demand for products and services.

With the slowing down in the growth of our major trading partners, Slovenian exports decreased in the third quarter. The surplus of goods is reduced. The government’s Institute of Macroeconomic Analysis and Development claims that the production of manufactured goods is more modest than last year. The production of motor vehicles, which is its driving force, is already lower than last year.

The situation in activities aimed primarily at the domestic market is similar to last year’s. Labor market conditions are improving more slowly than last year, while wage growth has improved. This mainly includes wages in the public sector, their increase is a result of the agreements reached with trade unions and of regular promotions.

The data from the Eurozone shows that gross domestic product growth remained modest. In October, the International Monetary Fund reduced economic growth forecasts both in the Eurozone and globally, highlighting strongly increased risks as well.

The mood in the economy is dropping. Fuel and energy prices are rising as a result of the rise in oil prices on world markets. In recent months, the growth in the prices of thermal energy has been more pronounced and electricity prices have risen as well. Food prices have risen somewhat again. The situation is stable for the banks, they point out, loans are gradually increasing, especially household debt as well.

The situation is not good at all. On top of everything, the expenditures in the Slovene public sector are increasing. The last additional expenditure of EUR 300 million went to so-called schoolchildren. What is going on with the 2019 budget, the public is not aware of. Worryingly, even the Fiscal Council has been silenced, that is, the body that controls the conduct of fiscal policy.


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