Going for Growth - Slovenia

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Slovenia The narrowing of the GDP per capita gap to the upper half of OECD countries has gathered pace. Nonetheless, the gap remains substantial and reflects low productivity and labour utilisation. The long crisis increased income inequality and poverty. Nevertheless, income redistribution in the tax and benefit system ensures a lower disposable income inequality than in most other OECD countries. The strong recovery has enabled income inequality to return to its pre-crisis levels. Greenhouse gas emissions are lower than the OECD average. The population is exposed to particle pollution coming from high levels of road and transit transport, wood stoves and expansion of lignite fired power plants. The reform momentum has slowed as the government has implemented most of its reform agenda. In late 2018, nearly two-thirds of the largest bank was privatised. Over the longer term, the government intend to keep a 25% stake. Accelerating and expanding the scope for privatisation would improve corporate governance, further attract foreign investment and improve resource allocation. Labour productivity could be bolstered by better tertiary education outcomes. Further pension reform should aim to encourage older workers to stay in the labour market. This should be combined with increased work incentives for the unemployed, including reforms of unemployment benefits, social assistance and taxes. Moreover, labour shortages call for better allocation of resources through more decentralised wage setting. Such a reform package would enhance long-term growth and improve fiscal sustainability. Growth performance, inequality and environment indicators: Slovenia C. Gaps in GDP per capita and productivity are narrowing

A. Growth Average annual growth rates (%) GDP per capita Labour utilisation of which: Labour force participation rate Employment rate1 Employment coefficient2 Labour productivity of which: Capital deepening Total factor productivity Dependency ratio

2002-08 4.3 1.0 1.0 0.3 -0.4 3.3 0.9 2.4 0.0

2012-18 2.6 1.7 0.6 0.7 0.4 1.3 -0.4 1.7 -0.4

Level

Annual variation (percentage points)

2016 24.4 (31.7)*

2013-16 -0.4 (0)*

9.5 (7.6)*

0.1 (0)*

2016 6.2 (10.9)* 0.2 (0.3)* 0.0

Average of levels 2010-16 6.4 (11.3)* 0.2 (0.3)* 0.0

Gap to the upper half of OECD countries5 Per cent 0

-10

-20

B. Inequality and environment

Gini coefficient3 Share of national disposable income held by the poorest 20%

GHG emissions per capita4 (tonnes of CO2 equivalent) GHG emissions per unit of GDP4 (kg of CO2 equivalent per USD) Share in global GHG emissions4 (%) * OECD simple average (weighted average for emissions data)

-30

-40

-50

GDP per capita

GDP per hour worked

-60

Source: Panel A: OECD, Economic Outlook Database; Panel B: OECD, Income Distribution and National Accounts Databases; United Nations Framework Convention on Climate Change (UNFCCC) Database and International Energy Agency (IEA), Energy Database; Panel C: OECD, National Accounts and Productivity Databases. StatLink 2 https://doi.org/10.1787/888933955332


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