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EBRD urges Slovenia to speed up privatisation – EBRD

EBRD urges Slovenia to speed up privatisation – EBRD Source: Slovenian government

LJUBLJANA (Slovenia), November 19 (SeeNews) – Slovenia needs to prioritise the sale of state-owned enterprises, as privatisation would enhance competitiveness and productivity, the European Bank for Reconstruction and Development (EBRD) said on Tuesday.

State-owned enterprises remain dominant in a few sectors, therefore privatisation should be accelerated so that performance can be improved, the EBRD said its 2019-2020 Transition Report.

“Further fiscal adjustments are needed to reduce public debt sustainably,” the bank added.

It noted that in light of still-high public debt levels, the authorities should keep expenditure growth under strict control to achieve their medium-term fiscal targets, while an ageing population highlights the need to reform the pension, health and long-term care systems.

The EBRD also said that despite significant improvements in recent years, corporate over-indebtedness points to the need for more capital market financing (primarily equity) and governance improvements.

“Robust economic growth is continuing,” the bank said, adding that Slovenia's gross domestic product (GDP) grew by 4.1% in 2018, following an increase of 4.8% in 2017.

“The economy is projected to grow at 3.0% and 2.8% in 2019 and 2020, respectively, as the temporary effects of the new investment cycle wear off and the economy reaches its potential,” the EBRD predicted.

Inflation has picked up but remained relatively low, averaging 1.9% in 2018 measured by the change in the harmonised index of consumer prices, the lender said.

“The business environment is improving. Slovenia ranks 37th (out of 190 economies) in the World Bank’s Doing Business 2020 report, three positions higher than the year before,” the bank noted, adding that the country ranks 35th among 141 countries - the same position as in the previous year - in the World Economic Forum’s Global Competitiveness Index 2019.