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Banka Slovenije BANKA SLOVENIJE BANK OF SLOVENIA MONTHLY BULLETIN April, 2005 Vol. 14 No. 4 BANKA SLOVENIJE BANK OF SLOVENIA Published by: BANK OF SLOVENIA Slovenska 35, 1000 Ljubljana Slovenia tel.: +386 (1) 4719000 fax.: +386 (1) 2515516 Telex: 31214 BS LJB SI E-mail: [email protected] http://www.bsi.si/ SWIFT: BSLJ SI 2X Editorial Board: Mr. Janez KOŠAK, Vice Governor Mr. Janez FABIJAN, Financial Statistics Mrs. Danica PRELOVŠEK, Central Banking Operations Mr. Janko TRATNIK, Banking Department Printed by: Geodetski inštitut Slovenije, Ljubljana Publication and other public use of data from this publication is permitted subject to statement of the source. Publication is available on the Web. For PGP key see last page. ISSN 1318-0770 (print) ISSN 1518-209X (online) Ta publikacija je na voljo tudi v slovenščini. 2 Monthly Bulletin, April 2005 BANKA SLOVENIJE BANK OF SLOVENIA TABLE OF CONTENTS REPUBLIC OF SLOVENIA: General Information 4 I. MONETARY REVIEWS AND POLICY 1-24 A. MONETARY REVIEWS 1. External environment 2. The real sector 3. Prices 4. The fiscal sector 5. Balance of Payments 6. Money and credit 7. Banking system B. MONETARY POLICY 1. Exchange rate 2. Interest rates II. STATISTICAL TABLES 1 Money and Banks 3 Financial Markets 20 Balance of Payments and External Position 39 Real Sector 69 Public Finance 74 Payment sistems and payment instruments 79 III. BANKING INSTITUTIONS IN SLOVENIA 1 VI. NOTES ON METHODOLOGY 1 Advance release calendar 17 Monthly Bulletin, April 2005 3 BANKA SLOVENIJE BANK OF SLOVENIA REPUBLIC OF SLOVENIA: GENERAL INFORMATION Date or period of Measured in: data: Area 20273,0 km2 2005 Population 1998697,0 število 31.12.2004 Population growth -0,1 % 31.12.2004 Population density 98,6 število / km2 31.12.2004 Population of Ljubljana 267192,0 število 30.06.2004 Origin of value added: 2003 Agriculture 3,2 % Industry 31,0 % Construction 5,8 % Services 60,0 % Total 100,0 % GDP real annual change 2,5 % 2004 Industrial production annual change 0,5 % February, 2005 Total employment annual change 0,7 % February, 2005 Unemployment rate (ILO definition) 6,3 % 2004 Annual inflation rate 2,7 % April, 2005 General government: revenue 41,5 % BDP 2003 surplus/deficit -1,4 % BDP 2003 Trade balance -46,7 mio EUR February, 2005 BOP current account -1,9 mio EUR February, 2005 International reserves 6.595,2 mio EUR 03.31.2005 Foreign exchange reserves 7.566,9 mio EUR 02.28.2005 Net foreign debt 2.174,0 mio EUR 02.28.2005 Gross foreign debt 15.852,0 mio EUR 02.28.2005 Currency unit: Slovenian tolar (SIT) 1 EUR = Euro central rate and compulsory intervention rate for Slovenia participating in ERM II:* Upper rate: 275,6 SIT Central rate: 239,6 SIT Lower rate: 203,7 SIT Latest BS exchange rates: 239,7 SIT 29.04.2005 *in force as of 28 June 2004. 4 Monthly Bulletin, April 2005 BANKA SLOVENIJE BANK OF SLOVENIA I. MONETARY REVIEWS AND POLICY A. MONETARY REVIEWS 1. External environment 2. The real sector 3. Prices 4. The fiscal sector 5. Balance of Payments 6. Money and credit 7. Banking system B. MONETARY POLICY 1. Exchange rate 2. Interest rates Monthly Bulletin, April 2005 1 -I. BANKA SLOVENIJE BANK OF SLOVENIA I.- 2 Monthly Bulletin, April 2005 The euro exchange rate on the daily market is fluctuating very close to the central rate. The average over February and March was SIT 239.74 to the euro, just 0.04% off the central rate, while in April it approached to 0.02% off the central rate. Both the IMF and Consensus revised their forecast of economic growth in the eurozone this year down- wards, the first to 1.6% and the second to 1.5%. The European Commission is forecasting economic growth of 1.6% in the eurozone, and economic growth of 2.0% in the EU25. The main factors that could cause economic growth to be lower than currently forecast are high oil prices and the strengthening of the euro against Asian currencies. The IMF revised its forecast of this year’s economic growth in the USA from 3.5% last autumn to 3.6%. Prices in the eurozone rose by 2.1% year-on-year in March, the same as in February, while in the USA year-on-year inflation rose from 3.0% in February to 3.1% in March. The rise in inflation was primarily the result of higher oil and food prices in both the eurozone and the USA. The ECB and the Fed left their key interest rates unchanged in April. Consumer prices were unchanged on average in April. Price rises in education, clothing and footwear, and fuels and electricity were entirely compensated for by falls in the prices of food and cars. The year- on-year inflation rate fell from 3.1% in March to 2.7% in April. The HICP fell to 2.7%, while the Maastricht convergence criterion, measured as the 12-monthly average, remained unchanged at 3.4%. The decline in annual inflation is expected to continue in May. Economic growth in Slovenia is showing signs of cooling. The current rate of growth in industrial output was negative on average during the first two months of the year, a reflection of the stalling in the foreign economic developments. The changes in the manufacturing sector at the beginning of the year were entirely opposite to those seen last year. Growth in the production of consumer goods, which was nega- tive last year, recorded the fastest rise of 10.4% in the first two months of this year. Production of capital goods and intermediate goods was lower than during the same period last year. The fastest growth was recorded by the machinery and car industries, while the largest year-on-year contraction in output was recorded by the electricity and leather industries. Year-on-year growth in total household incomes amounted to 3.1% in the first two months of the year. The lower growth rate is a reflection of the year-on-year decline of 8.2% in other earnings from employment, and slower growth in social transfers, which rose by 1.8% year-on-year on average during January and February. Growth in the average wage is slowing, but remains relatively high. The average gross wage rose by 4.9% year-on-year in February in nominal terms, or by 2.2% in real terms. Employment at companies and organisations rose by 1.2% during the first two months of the year, with the largest rise being recorded in the car industry, the rubber industry, the hotels and restaurants sector and the real estate sector. More comprehensive data gathering (the statistical register of employment in place of surveys) shows a rise of 25,000 in the active population. Registered unemployment fell by 0.3 percentage points to 10.4% in January and February, while the ILO unemployment rate stood at 6.4% in the final quarter of 2004. There was a surplus of EUR 49 million in the current account in the first two months of the year, down EUR 42 million from the same period last year. In addition to the deficit in trade in goods, another factor in the lower current account surplus was high outflows in net transfers as a result of payments into the EU budget. The financial account recorded a positive net amount of EUR 104 million in February. The main source of inflows was borrowing by the private sector, while the main item in outflows was portfolio investments abroad, which reached EUR 109 million in February. The preliminary figures for March show portfolio investments abroad to be strengthening further, particularly in the household sector. The gross external debt rose by EUR 0.5 billion to EUR 15.9 billion. The proportion of Slovenia’s total external debt ac- counted for by banks had risen from 25% in 2003 to more than one-third by this February. Lending activity remains strong. Year-on-year growth in household lending stood at 22.6% in March, while the rate for corporate lending was 24.2%. This year the government has primarily borrowed from banks via securities issues, while making a net repayment of loans. The narrow money aggregate is growing slightly more slowly this year at a year-on-year rate of 27.2%, while broad money is growing slightly more quickly, the rates being 6.3% for M2 and 7.9% for M3. The Bank of Slovenia has not changed its interest rates since Slovenia entered the ERM II. At the beginning of April it raised the foreign exchange swap rate by 0.25 percentage points, and offered banks the final pur- chase of accumulated foreign exchange swaps from the past in the amount of EUR 300 million. The foreign exchange swap rate thus now stands at 1.5%, while the Bank of Slovenia refinancing rate is 3.5%. BANKA SLOVENIJE BANK OF SLOVENIA A. MONETARY REVIEW 1. INTERNATIONAL ENVIRONMENT 6 4 REAL GDP INFLATION (CPI) (annual growth, %) 5 (annual growth, %) USA 4 3 EU(12) 3 2 2 1 EU (12) USA 0 1 2001 2002 2003 2004 2002 2003 2004 2005 6 1.40 INTEREST RATES 1.35 (Libor, annual growth, %) EUR/USD 5 1.30 EXCHANGE RATE USD (3 mth) EUR * (1yr) 1.25 4 EUR * (3 mth) USD (1yr) 1.20 ECB (repo rate) 1.15 3 1.10 1.05 2 1.00 0.95 1 0.90 0.85 0 0.80 2002 2003 2004 2005 2002 2003 2004 2005 Certain institutions started to pitch slightly lower pre- The Federal Reserve and ECB did not change interest rates dictions for economic growth in the eurozone this year, in April.
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