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The epidemic year 2021 is the year of record achievements of the Slovenian government, which raised Slovenia from the crisis

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(Photo montage: Demokracija / iStock)

By: Vida Kocjan

In the Republic of Slovenia, we have above-average economic growth and historically high employment. The government led by Janez Janša has boosted the economy, the pre-crisis level has already been reached, and the country is, by many indicators, well above the level of previous KUL governments.

Slovenia achieved record economic growth this year, gross domestic product (GDP) in the first nine months of 2021 was 7.4 percent higher than in the same period in 2020. The purchasing power of the population is high, wages are higher than a year or two ago, pensions are also higher, the economic downturn from last year has already been offset by the state. We therefore have every reason to look to the future with optimism, as Prime Minister Janez Janša said in one of the television talks shows.

We are also achieving a year of record growth in the field of investments. In the third quarter, these increased by 9.6 percent. Exports were 10.6 percent higher. In the third quarter, 1,065,700 people were employed, the most in the history of Slovenia. As a result, we have extremely low unemployment, which is already at the level of 2008, when it was the lowest in the country’s history.

We achieved all this despite the covid-19 epidemic, which put the country in the biggest health crisis in an independent country.

Economic growth

The Bank of Slovenia has forecast 6.7% GDP growth for the whole of 2021, and the high economic growth from this year is expected to continue next year. This year’s economic growth in Slovenia will also be significantly higher than in the euro area, where it will be 5.1%. Economic growth in Slovenia will continue to be broad-based, supported by both domestic demand and the export activity of companies. The forecasts are therefore extremely encouraging. In 2019, Slovenia had only 3.3% GDP growth, although it was a country in a period of high economic activity. In the years from 2015 to 2018, GDP growth ranged from 2.2 to 4.4 percent. So, 2021 is really a year of records.

High private consumption

High economic growth in Slovenia is also the result of increased private consumption by households. This is extremely high this year. Compared to 2019, it doubled (growth from 4.8 to 9.6 percent). After the period 2015 to 2018, the growth was from 2.2 to 4.4%. High private consumption reflects the high incomes of citizens, who also save from a quarter to a fifth of all income every year, so that Slovenia ranks fourth among EU countries in terms of the level of savings. The situation has improved significantly over the last two years. At the end of 2019, citizens had savings of around 17.9 billion euros in bank accounts, two years later around 24 billion euros.

Double exports and record investment growth

Exports of goods and services also make a high contribution to economic growth. This increased by 10.8 percent this year, compared to 2019, the growth more than doubled. In 2019, export growth was only 4.5%. It was 6.2% in 2018 and 4.7% in 2015.

Gross fixed capital formation increased by 13.8 percent this year. They were 4.1 percent lower last year, but that was not the biggest drop. In 2019, during the time of the left-wing government, investments fell by 8.2 percent. In 2015, the decline was 1.2%, a year later 3.6%. They then rose, but to a maximum of 10.2 percent in 2017. In 2019, the decline was 8.2 percent.

In addition to all this, state’s investments increased significantly this year, by as much as 25.4 percent, which is a record growth. For comparison: in 2016, the decline in state investment was as much as 31.7 percent, in 2019 we witnessed minimal growth, only 2.3 percent. In 2020, they fell by 1.7 percent, which was very little compared to the epidemic.

The Bank of Slovenia also forecasts investment growth in the coming years, by 17.2 percent in 2022 and 4.4 percent in 2023. The reason for this is that the investments are also supported by investments co-financed by European Union support schemes to strengthen economic activity and resilience after the epidemic.

Drawing European funds

In the 2014-2020 programming period, Slovenia was entitled to 3.067 billion euros from European cohesion policy. Let’s remember. This amount was also reached by the government of Janez Janša in 2012. Funds can be drawn with a two-year delay, which means that by the end of 2023, talks are underway for a new financial period.

The absorption of European funds from the current programming period has been catastrophically poor. By March 2020, we had spent only 41 percent of the allocated funds, we were below the EU average and it seemed that we would not “bring” the money to Slovenia. The current government has accelerated drawing enormously. At the end of 2020, Slovenia had already spent 57 percent of its funds, which is more than the EU average, which was 55 percent at the time.

According to the latest data, the Office of the Government of the Republic of Slovenia for Development and European Cohesion Policy, headed by Minister Zvone Černač, has already allocated all funds. Moreover, the amount for the allocated projects already exceeds the available funds by 12 percent. Therefore, the approval of new operations will be completed by the end of 2021. Excessive spending rights will have to be provided from the state budget.

Most of the European funds under the already granted rights are intended for large infrastructure projects, such as the upgrade of the railway connection from Maribor to Šentilj. Among other things, they are financing part of the second Divača-Koper track, the completion of the Podravina motorway to Gruškovje, the upgrade of the Karavanke tunnel and the modernisation of the Pragersko railway hub. A lot of money is also spent on environmental projects.

Investments in homes, healthcare, education, and kindergartens

It is also very important that the government has opened a record investment cycle for the care of the elderly. More than 100 projects are underway.

Not only that. Long-term care employees’ salaries are increased by three to four salary grades. With 32 million euros, they helped hire more than 650 staff in the homes. However, the care home fees will not be higher due to the salary increase. Let’s remember. The previous governments spent 75 million euros on various studies instead of building homes, improving the quality of living and more appropriate remuneration of employees, which was also pointed out by the Court of Audit.

As in nursing homes, it is also happening in the field of health care and educational activities. The government announced a tender for the construction of schools and kindergartens, the first since 2011. As many as 123 projects were applied for, and the government then provided money for all those who applied. In the field of health, projects are underway that will be financially covered by European funds.

Higher wages and averages allocated for municipalities per citizen

Employee salaries have risen by more than a tenth in recent times. At the same time, the government took a measure to relieve wages. With higher general relief, net wages would be gradually higher; thus, in 2025, each employee would receive one more monthly net salary. In the National Assembly, KUL MPs blocked this, so the decision on lower income tax and some other tax reliefs (including benefits for seniors over 70, employment benefits, etc.) has been postponed to 2022. This is now the fourth blockade on tax reduction from KUL. The SDS proposed lower taxes in 2017, 2018 and 2019, but the KUL members rejected everything.

Last year, the government relieved municipalities of the burden of paying certain costs that are not within their competence. It has increased the amount of the average money they get per citizen, including 2022, by about 50 euros per citizen. This gives municipalities more resources for their development. Previous governments did not even think about it, as many mayors testify.

Commendable achievements

More detailed comparisons of the results and successes of the government are presented in individual graphs. Although KUL (SD, LMŠ, Levica, SAB and Nepovezani) claim through their own and Odlazek’s media, which are their trumpets, that everything is wrong in Slovenia, everyone can create a true picture for themselves. Data for the text were drawn from data from the Bank of Slovenia, the Statistical Office of the Republic of Slovenia and the Government Office for Macroeconomic Analysis and Development.

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