By: Moja Dolenjska
As part of his working visit to China, which began on Tuesday and will continue until Sunday, Finance Minister Klemen Boštjančič met with his Chinese counterpart, Lan Foan. He also held meetings with the governor of the People’s Bank of China, Pan Gongsheng, and representatives of Chinese banks, with whom Slovenia could potentially cooperate on issuing so-called panda bonds.
Panda bonds are debt securities denominated in Chinese yuan and issued on the Chinese market. These bonds serve as collateral for borrowing. Slovenia is expected to issue panda bonds in China in 2026, which means that Prime Minister Golob’s coalition plans to further increase the country’s debt, not within the eurozone, but in China.
So far, Golob’s government has already increased Slovenia’s debt by €6 billion. Over the next two years, they plan to borrow more than €4 billion to cover the budget deficit, which occurs when government expenditures exceed revenues.
A financial trap for future governments
The ruling coalition is setting a financial trap for future administrations, which will likely have to curb public spending in certain areas, a major political challenge. As journalist and editor Tilen Majnardi wrote in the article Public Finances on the Edge of Possibility, it is as if the current government no longer believes in the much-promoted second term.
In one year, €2 billion added, debt-to-GDP ratio rising, despite Golob’s claims to the contrary, misleading
Majnardi published official data on Slovenia’s gross consolidated debt over the past year on the +PORTAL platform. The figures show an increase in debt from €45.4 billion to €47.5 billion. The gross consolidated debt as a percentage of GDP is expected to reach 69.4% this year and continues to rise. In recent months, the debt has grown, as minimal economic growth combined with extensive new borrowing no longer allows for a reduction in this ratio, despite government claims to the contrary. The Freedom Movement party has been particularly “bold” in its misleading statements.
“The government, despite near-full employment (which, considering various forms of flexible work, remote work, and excessive hiring without clear responsibilities in the public sector, does not necessarily reflect the true state or ‘health’ of Slovenia’s economy), and minimal economic growth (0.8% according to the latest data from UMAR), is projecting an additional budget deficit of more than €4 billion over the next two years. It is important to highlight that during its term, the government has already increased the national debt by €6 billion,” Majnardi writes.