Slovenia Business Forecast Q1 2007

Content

• Chapter 1: Political Outlook
  • BMI Core Scenario
  • SWOT Analysis
  • BMI Political Risk Ratings
  • Domestic Political Outlook
  • Local Elections In The Offing
  • Recent opinion polls showing the ruling Slovenian Democrats in the lead running up to the October 22 local elections
  • leave the government little scope for complacency, with voters also expressing dissatisfaction with the government's
  • performance half-way through its term The pace of structural economic reform will continue to be conditioned by
  • Slovenia's traditionally consensual style of government
  • Table: Slovenia Cabinet & Other Key Posts (as of October 2006)
  • Foreign Policy
  • Is EU Membership Living Up To Expectations?
  • At 63%, the proportion of CEE citizens who think their countries have benefited from EU membership is higher than
  • the EU-25 average of 54% Yet with complete free movement of labour still off the agenda, and euro adoption timetables
  • slipping, progress on some key areas has not been an unmitigated success Despite this, we believe real convergence
  • will continue, even if at a slower pace than originally anticipated
• Chapter 2: Economic Outlook
  • BMI Core Scenario
  • SWOT Analysis
  • BMI Economic Risk Ratings
  • Introduction
  • Inflation Challenge
  • The Slovenian economy is in good shape in the final months running up to its entry to the eurozone on January 1
  • After a buoyant 50% year-on-year (y-o-y) expansion in H106, GDP growth is expected to be 48% for the year as
  • a whole, and to remain solid in 2007
  • Table: GDP, Output & Population
  • Economic Activity
  • Growth At Seven-Year High
  • While we have hiked our 2006 GDP growth forecast to a seven-year high of 48%, we are preserving our 2007 projection
  • at 42% in light of the anticipated easing of growth in the eurozone This is nevertheless a favourable outlook, and
  • should be supported by tax cuts, as well as Slovenia's EU, and forthcoming eurozone, membership
  • Table: Breakdown Of GDP By Expenditure
  • Fiscal Policy
  • Budget Strategy To Increase In Importance
  • Once Slovenia becomes the thirteenth member of the eurozone on January 1 2007, totally relinquishing its ability
  • to conduct independent monetary and exchange rate policies, the importance of fiscal policy as a means to manage
  • domestic demand and preserve economic competitiveness will increase commensurately In this light, recent downward
  • revisions to both historical fiscal deficit figures and the government's forecast for this year's gap are welcome,
  • but still suggest little room for complacency
  • Monetary & Exchange Rate Policy
  • The Tolar's Final Quarter: The Implications
  • With euro adoption on January 1 2007 a done deal for Slovenia and serious switchover problems unlikely if the
  • eurozone's previous experience is any thing to go by, attention is now set to switch to life without a national currency
  • EU membership has already brought a convergence in legal systems and freed up the market in capital and goods,
  • which is of the highest importance to the country's attractiveness as an FDI location
  • Balance Of Payments
  • Benign Outlook
  • BMI envisages a benign scenario for the current account over our five-year forecast period, with an estimated deficit
  • below 25% of GDP in 2006 expected to turn to a slight surplus by 2011 Slovenia's integration into the eurozone
  • will support exports, but the structural limitations on European growth will remain a key constraint to a
  • more rapid expansion
  • Table: Current Account
• Chapter 3: Special Report
  • BMI Sovereign Risk Ratings
  • What And Where Are The Risks?
  • Table: BMI Sovereign RIsk Ratings
  • Emerging Europe
  • Diverging Ratings Trends
  • Table: Emerging Europe Sovereign Ratings - Evolution of Ability to Pay
  • Table: Emerging Europe Sovereign Ratings - Evolution of Willingness to Pay
  • BMI Sovereign Ratings Index Methodology
• Chapter 4: Business Environment
  • BMI Core Scenario
  • SWOT Analysis
  • BMI Business Environment Risk Ratings
  • Legal Framework
  • Overview
  • Labour Force
  • Size
  • Table: Employment Indicators
  • Table: Demographic Indicators
  • Foreign Investment Policy
  • Overview
  • Foreign Trade Regime
  • Overview
  • Table: Emerging Europe, Annual FDI Inflows
  • Table: Slovenia, Annual FDI Inflows
  • Tax Regime
  • Overview
• Chapter 5: Key Sectors
  • Food & Drink
  • Retail
  • Table: Retail indicators
  • Table: Slovenia Food Consumption Indicators - Historical Data & Forecasts
  • Pharmaceuticals & Healthcare
  • Market Summary
  • Table: Slovenia Pharmaceuticals Indicators