Slovenia's finance minister looks to keep the good news coming
Slovenia's minister of finance, Dušan Mramor, tells Stefanie Linhardt how he is overseeing the reduction of its budget deficit, economic growth, rising employment and a burgeoning privatisation programme.
Q: The Slovenian budget deficit has fallen from 15% in 2013 to 5% in 2014 and is now expected to be 2.5% for 2015. What are your expectations for 2015 and how are you planning to achieve this?
A: It is practically not possible to achieve fiscal consolidation without growth and we were very lucky to have had growth of nearly 4% in both 2014 and 2015. [In 2016] we are expecting growth to be a little lower, at about 1.7%, but still high enough to enable us to carry out further fiscal consolidation, so that at the end of this year we should have about 2.3% deficit and in 2017 1.7%.
All of these policies together enable the growth of domestic consumption, which is the goal – not just on the basis of exports, which was the case in the past two years, but also domestic consumption and new investment in the corporate sector, which is of paramount importance to have sustainable growth.
Q: What other parts within your 2016 budget are key points, apart from the budget consolidation measures?
A: This year, what we have really prioritised is security. We have enhanced our police forces with additional budget expenditures. The same is true, to certain extent, for the health sector – [which is necessary] because of [Slovenia's] ageing population – and education. For us, these are the areas we would like to support in 2016 and 2017.
Q: You are also at the forefront of the Slovenian privatisation programme. What are the key targets for privatisation for this year?
A: We have a special system now for privatisation. First, we have had a decree by parliament on 15 companies that should be privatised. Seven of them have been privatised, including the country's second largest bank.
Then, we have [our] strategy of managing state-owned assets. We have put companies into three categories: strategic, important and portfolio. Every year, out of our portfolio companies, we decide how many will be privatised and which ones. This year, we have 35 companies on the table, and these are the portfolio investments that we would like to dispose of this year.
[In March this year, Slovenia’s largest airline Adria Airways was privatised. The new owner, German investment house 4K Invest, now holds a 96.09% stake in the business through its Luxembourg-listed fund.]
Q: Among the important assets to be privatised is NLB, the largest bank in the country. What is the latest plan and timetable for privatisation there?
A: The privatisation of NLB is planned to start this year. It should be concluded by the end of next year and hopefully we will be able to close this deal successfully.
[NLB is in the ‘important’ bracket of assets to be privatised, which means that the government is seeking to keep a controlling stake of 25% plus one share in the bank.]
Q: What is Slovenia's economic outlook for 2016?
A: In 2016, we expect the good trends from the past to continue – especially in employment, which has been growing now for two-and-a-half years. Also, unemployment is coming down. We expect it will stay well below the European average – it is at 9.1% at the moment. These areas will definitely continue to be good trends.
Then we have a current account surplus. Last year, it was 7.3%. This year, we expect it to be even higher, which is enabling the deleveraging of companies. We expect companies will invest quite a lot this year. This, together with household consumption, which is already growing, should support the growth this year.
Dušan Mramor is Slovenia's minister of finance, a role he also held from 2002 to 2004.
