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Nov 23, 2017 14:26 EEST
November 23 (SeeNews) - Slovenia must improve corporate governance and speed up privatisation next year, in order to secure future convergence, the European Bank for Reconstruction and Development (EBRD) said.
"High corporate indebtedness, complex ownership structures and the large footprint of underperforming SOEs [state-owned enrerprises] in the economy weigh on investments, whose share in GDP has been falling almost constantly since 2008, the EBRD said in its 2017-2018 transition report published on Wednesday.
The EBRD estimated Slovenia's progress on privatisation has been sluggish.
"Of 33 SOEs planned for privatisation in 2016, three have been successfully privatised, while the tender process has started for another 13 companies. The majority of the remaining enterprises are in the privatisation plan for 2017, which envisages the sale of 20 state-owned companies in total, including Slovenia’s largest and third-largest banks (NLB and Abanka, respectively)."
Slovenia should also focus on tackling the remaining non-performing loans (NPLs) and corporate debt next year, the EBRD noted.
The EBRD also said that Slovenian banks still hold significant bad portfolios in relation to small and medium-sized enterprises (SMEs) and added that, despite significant deleveraging in recent years, the long-term debt of over-indebted companies is still high.
In addition, Slovenia must focus its business environment reforms on improving competitiveness and governance, the lender said.
Measures that should be high on the agenda in 2018 include: privatisation, improving SME access to finance, easing construction permits, improving contract enforcement, and enhancing SOE corporate governance standards, according to the report.
The EBRD predicts Slovenia's GDP growth will speed up to 4.0% in 2017, from 3.1% last year, before slowing down to 2.9% in 2018.
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