Our comprehensive assessment of Slovenia's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Slovenia, as well as the latest industry developments that could impact Slovenia's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Slovenia before your competitors.

Country Risk

Slovenia Country Risk

BMI View:

Core Views

  • Political instability will remain elevated as the four-party government coalition attempts to push through harsh austerity measures that will likely prompt parliamentary tensions and social unrest.

  • The short-term economic outlook has improved in light of accelerating regional economic activity and a slight rebound in domestic demand.

  • The corporate sector remains overleveraged and will remain a major risk to the banking sector - unless ultimately some form of restructuring takes place, whether on the loans itself to reduce debt servicing costs, or through cost cutting (shedding jobs/trimming investment).

Major Forecast Changes

  • We have adjusted our growth forecasts to take into account recent data and now expect that Slovenia will exit...

To read the full article Register for Free or Login

Slovenia Operational Risk Coverage (9)

Slovenia Operational Risk

BMI View:

Slovenia's labour market supports the country's business environment due to its highly educated workforce and access to the labour pool of 27 European states. Reforms are currently underway at the tertiary level to address the skills shortage stemming from low graduation rates in science and engineering. However, high labour costs offer the most significant detraction to investing in Slovenia, and serve to depress its score of 60.0 out of 100 in the Labour Market Risk Index, placing it ninth out of 30 emerging European countries, in between Lithuania and Latvia. 

Slovenia benefits from a highly-educated workforce, with strong basic skills and equality of education among the female and male population. However, Slovenia has a small population of working age with modest population growth prospects, set to grow by just 1% in the next 20 years, which detracts from the overall score. In addition, the even distribution of the labour force between...

To read the full article Register for Free or Login

Slovenia Crime & Security

BMI View:

Slovenia is a generally safe place for foreign business travellers, expatriates and tourists, and foreigners are not at higher risk of crime than Slovenian citizens. The main threats to foreigners are from petty crime and robbery rather than violence or indiscriminate acts of political violence. Slovenia also has considerably less organised crime than newer members of the EU such as Bulgaria and Romania. This contributes to a regional and global outperformance in the BMI Crime and Security Index, with a score of 94.6 out of 100.

The main risks to foreign business travellers, expatriates and tourists are from relatively petty crimes such as pick-pocketing and bag snatching. According to a survey conducted by the Organisation for Economic Co-operation and Development (OECD), some 81% of Slovenians feel safe walking home late at night, which is indicative of a secure and low risk environment. Slovenia is the regional...

To read the full article Register for Free or Login

Slovenia Labour Market

BMI View:

Slovenia's labour market supports the country's business environment due to its highly educated workforce and access to the labour pool of 27 European states. Reforms are currently underway at the tertiary level to address the skills shortage stemming from low graduation rates in science and engineering. However, high labour costs offer the most significant detraction to investing in Slovenia, and serve to depress its score of 59.6 out of 100 in the Labour Market Risk Index, placing it ninth out of 30 emerging European countries, in between Lithuania and Latvia, and 42 nd globally, just above Saudi Arabia.

Solid labour availability boosts Slovenia's overall position in the Labour Market Risks Index. Its regional outperformance in this category is underlined by a sizeable labour force with strong basic skills. In addition, female labour participation rates are high by regional standards, which expand the talent and size of Slovenia'...

To read the full article Register for Free or Login

Slovenia Logistics

BMI View:

Slovenia's supply chains benefit from a well-developed and connected transport network, timely trade procedures and governance, and a positive growth look which contributes to its solid regional and global performance in the BMI Logistics Risk Index. A score of 61.4 places Slovenia seventh in the region, between the Czech Republic and Hungary. However, poor air connectivity, high utilities costs and an underperforming market size serve to suppress the overall score and Slovenia's attractiveness to investors.

High electricity and fuel costs, and a sluggish emergence from recession, contribute to Slovenia's underperformance in the Market Size and Utilities section of the BMI Logistics Risks Index. Slovenia scores 53.4 out of 100 overall, in 15th  place in the region out of 30 states behind Albania and just above Turkey. This represents the country's lowest score across the three...

To read the full article Register for Free or Login

Slovenia Trade & Investment

BMI View:

Slovenia faces few trade and investment risks for investors due to its relatively open economy and harmonization of EU regulations. The major risks to trade are posed by the lack of available credit in the banking sector and underdeveloped capital markets. However, the government offers attractive financial incentives to certain industries. In addition, stable institutions and low levels of corruption help to further mitigate these risks. Slovenia's outperformance across the three pillars in the Trade and Investment Risk Index is reflected by its overall score of 70.9 out of 100, placing it fifth regionally after the Estonia, Lithuania, Hungary, and Cyprus and 18th th out of 170 countries worldwide.

Slovenia is a relatively open country for economic activity, due to its market-oriented economy and tariff-free access to the markets of its 26 EU peers. However, risk to investors is posed by the absence of a formal FDI strategy and...

To read the full article Register for Free or Login

Slovenia Industry Coverage (14)

Autos

Slovenia Autos

BMI View:

The most recent data available from Slovenia's Association of Automobile Manufacturers and Authorised Importers suggest that 2013 could have been a positive year for new car sales. January to November new vehicle sales (cars + vans) were up by 4.8%, at 54,493. This headline figure was made up of 48,279 cars and 6,214 light commercial vehicles (LCVs). BMI also obtains estimates for HCV and bus sales from the European Automobile Manufacturers Association (ACEA). These show a total of 1,007 HCVs plus 137 buses sold over 11M13. Adding all of the above numbers together, this gives a total of 55,637 vehicles sold in Slovenia over the first 11 months of 2013.

For the full year, we forecast growth of 7.9%, to reach 60,695 units. December 2012 was a particularly difficult month for Slovenian new car sales (which fell by 20% over the one month alone, during a period when there was mass rioting across the country), so we feel...

To read the full article Register for Free or Login

Commercial Banking

Slovenia Commercial Banking

BMI View:

...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

To read the full article Register for Free or Login

Defence & Security

Slovenia Defence & Security

BMI View:

BMI View: Defence expenditure as a proportion of GDP rose in the last decade, from 1.15% of GDP in 2000 to 1.6% of GDP in 2010. However, it has declined since then, and we forecast defence spending to remain at 1.2% of GDP in 2013, rising to 1.3% by 2015. This is well below the NATO European average of 2.2% and below the 2% target that NATO members adopted as a target for 2014.

For budgetary purposes, the Slovene armed forces are not divided into army, air and naval forces. Of total active armed forces, 7,500 belong to the land brigade, 530 to two air battalions, 47 are employed in one naval battalion and 4,500 are paramilitaries, all of whom are members of the armed police service. In addition, the Slovene military has an estimated reserve force of 20,000 and a further 5,000 reserve paramilitary personnel.

The Slovenian military is undertaken a modernisation programme....

To read the full article Register for Free or Login

Food & Drink

Slovenia Food & Drink

BMI View:

BMI view: While macroeconomic data indicates that Slovenian economy is finally exiting recession, household consumption is expected to remain curtailed by elevated unemployment levels and slow wage growth. Benefit cuts will continue to weigh down discretionary spending, with prices of certain goods rising following the mid-2013 implementation of higher value-added tax rates. As a result, we forecast a very modest growth in Slovenian food and drink market to 2018.

Headline Industry Data 

  • Food consumption (local currency) growth (year-on-year, y-o-y) in 2014: +0.2%; compound annual growth rate (CAGR) to 2018: +1.0%

  • Per capita food consumption (local currency) growth (y-o-y) in 2014: -0.0%; CAGR to 2018: +0.8%.

  • Alcoholic drinks value (local currency) sales growth (y-o-y) in 2014: +1.2%; CAGR to...

To read the full article Register for Free or Login

Freight Transport

Slovenia Freight Transport

BMI View:

We anticipate year-on-year (y-o-y) improvements across the board in the Slovenian freight transport mix in 2015, which mirrors the upgraded growth estimate and forecast for the economy as a whole in 2014 and 2015 respectively. This growth will be built on the back of stronger than expected exports, as well as early indications that household consumption is finally recovering. Nonetheless, a considerable corporate debt overhang and government austerity plans will cap the overall pace of real GDP growth.

The Slovenian freight sector will certainly be buoyed going forward by stronger than expected exports in the first half of 2014, which bodes well for tonnage handled across the freight modes in 2015. With that in mind, the outperformer in terms of y-o-y growth is set to be the country's smallest mode by output, the air freight sector (5.69%), while the rail and road modes are both set to record steady growth over the next 12 months (4.40% and 4...

To read the full article Register for Free or Login

Information Technology

Slovenia Information Technology

BMI View:

BMI View:   T he   development of the Slovenian IT market was stymied in 2012 and 2013 by the challenging economic environment - but BMI now forecasts a more robust economic recovery in Slovenia from 2014, which should put the IT market back on a faster medium term growth trajectory . Despite the major challenges faced in recent years the IT market has performed relatively well, and as confidence returns there will be opportunities for vendors.   Privatisations by the government, the wider trend of m odernisation of enterprises and public administration...

To read the full article Register for Free or Login

Infrastructure

Slovenia Infrastructure

BMI View:

BMI View: We remain bearish on the outlook for the Slovenian construction industry, premised on the poor outlook for the broader economy. Although we were over pessimistic at -7.7% year-on-year (y-o-y) growth in 2012, which came in at -6.8% according to official statistics, our bearish view played out. In light of very little activity in the infrastructure sector, and poor outlooks for personal consumption and fixed investments, we forecast that the industry will contract in 2013 by 4.6% and 0.5% in 2014. Tightness in the banking sector, even after recapitalisation in December in 2013, and deepening cuts will diminish scope for investment in construction projects in the medium term. Consequentially, we forecast the Slovenian construction industry value to reach EUR2.53bn (US$3.04bn) through the forecast period, growing by a modest average of 2.4% y-o-y (in real terms) between 2015 and 2023.

The cautious growth in the...

To read the full article Register for Free or Login

Insurance

Slovenia Insurance

BMI View:

BMI View:   As of late 2014, it is clear that market leader Triglav has achieved a significant increase in profits this year. However, this is partly because of a sharp improvement in investment earnings and partly due to rigorous control of claims and other costs. Premiums have been contracting in both the life and the non-life segments. As we expected, the difficult economic conditions in Slovenia, and brutal competition in the motor vehicle insurance sub-sector (especially) have continued to have an adverse impact. We see no reason for a decisive improvement in conditions. Taking a five year view, we remain of the view that some of the multi-nationals who are present in Slovenia (and usually with minor market shares) will reconsider their commitment to the market.

The data and newsflow from...

To read the full article Register for Free or Login

Medical Devices

Slovenia Medical Devices

BMI View:

BMI Industry View:   The Slovenian medical device market is expected to grow by just 0.6% per annum to 2018, but a struggling economy and political instability, not to mention allegations of corruption and division within the healthcare system, could further affect funding and spending patterns in the short to medium term.

Headline Industry Forecasts

  • The medical equipment market is small, constrained by the country's small size. It is, however, one of the richest markets in the European region when viewed on a per capita basis. In US dollar terms, the market is expected to increase by a CAGR of just 0.6%, which should see it rise from an estimated US$294.3mn in 2013 to US$302.6mn in 2018. By...

To read the full article Register for Free or Login

Oil & Gas

Slovenia Oil & Gas

BMI View:

B MI View:   There are glimmers of hope in the upstream oil and gas segment, with the Ascent-operated Petišovci tight gas scheme capable of improving near-term energy self-sufficiency and slowing the rate of growth in gas imports. The project is currently in the detailed permitting phase, facing unexpected slowdowns due to the lack of an established Slovenian regulatory infrastructure and new EU tendering obligations the country adopted in 2013. Ascent expects that the permitting required for phase one will be put to public consultation in Q1 2015. However, overall volumes are likely to be relatively modest, with imported Russian gas set to dominate supply for the foreseeable future. Slovenia is opposed to proposals for an Adriatic LNG terminal that is backed by Italy. This puts the country at odds with EU energy policy in the region.

Headline...

To read the full article Register for Free or Login

Pharmaceuticals & Healthcare

Slovenia Pharmaceuticals & Healthcare

BMI View:

BMI View:   We have maintained our forecasts for Slovenia going into 2015. However, we caution that with the new coalition government in place, reform of the healthcare sector is imminent over the coming months in the attempt to bring the budget deficit down. As a result, going into 2015 and 2016 we anticipate that the focus will remain on local generic drugmakers, with limited opportunities for innovative multinational companies.

Headline Expenditure Projections

  • Pharmaceuticals: EUR720mn (USD960mn) in 2013 to EUR700mn (USD940mn) in 2014; -2.2% in local currency terms and -1.3% in US dollar terms. Forecast unchanged from previous quarter.

  • ...

To read the full article Register for Free or Login

Retail

Slovenia Retail

BMI View:

  1. BMI View:   We forecast that political instability and delays in public sector reform will create obstacles for the growth of Slovenia ' s retail market during the next few years. Total household spending is anticipated to slump by more than 5% in 2015 and will not start rebounding until 2017. The spending patterns will alter as the number of people older than 65 years consistently approaches 20% of total population by the end of 2018.

  1. With two early elections in three years period Slovenia is undergoing a major political change. The new government aims to improve tax collection and reduce public spending which will unavoidably reverberate through the economy. We expect Slovenia's real GDP to grow...

To read the full article Register for Free or Login

Telecommunications

Slovenia Telecommunications

BMI View:

BMI View: Slovenia's fairly small size and population has led to the market becoming saturated quickly, with minimal levels of growth throughout the sector. The continued dominant position of state-owned Telekom Slovenije has also stunted overall growth and investment in the market. With limited subscriber growth opportunities, we expect to see increased levels of M&A activity, as consolidation of smaller players by larger companies plays out over the next few years. For such a small market, there are too many active players, none of which can properly challenge Telekom Slovenije. This has led to bankruptcy procedures at T-2 as well as Tusmobil becoming an acquisition target Telemach and Telekom Austria. The p rivatisation of Telekom Slovenije expected to be sold by February 2014,...

To read the full article Register for Free or Login

Tourism

Slovenia Tourism

BMI View:

The Slovenian tourism industry is benefiting from 2013's record growth in revenues, and this is set to continue into 2014 on the back of the continuing domestic economic recovery and the stabilisation of the wider region, which contains Slovenia's key tourism source markets. We expect the focus on mountain retreats, health resorts and spas to continue. However, we believe more-high end developments are needed to attract the larger hotel groups, which continue to have a very limited presence in the country.

Leading indicators suggest that Slovenia is now in the early stages of economic recovery. Improvements in retail consumption have also likely been supported by concomitant improvements in wage growth, in turn encouraging spending on tourist holidays, both domestically and internationally. We expect rising wages and consumer spending to encourage domestic and outbound tourism for Slovenia over the longer term.

Inbound...

To read the full article Register for Free or Login