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IMAD: Labour Market Stable, But Worse Off than Last Year

Ljubljana, 08 September (STA) - Economic activity in Slovenia, which expanded by 0.1% in the first half of 2011, is still being propelled by exports and held back by construction, the government think-tank IMAD said on Thursday. It added that the situation on the labour market had stabilised over the first six months, but was worse than a year ago.

The size of the active population did not change much in the first half of 2011 and was 2.3% lower than in the same period last year, the Institute Institute for Macroeconomic Analysis and Development (IMAD) says in the latest issue of The Economic Mirror.

The number of registered unemployed persons decreased over the first six months, but was still 13.1% higher year-on-year. In July, the jobless number increased after several months of decline to 107,562.

Seasonally adjusted data show that the average gross pay increased by 0.2% in the second quarter over the first quarter and was 2% higher year-on-year.

"The average gross pay in the public sector has been stagnating for a year and a half, while growth in the private sector has been slowing down since the first quarter of 2010, following the increase in the minimum wage."

IMAD moreover said that Slovenian banks remained sluggish with their loan activities in July, while foreign sources of financing remained limited.

Companies and other non-financial sector organisations repaid more of their loans in July, as they continued paying out their domestic and foreign debts.

In the first half of this year, companies secured a total of EUR 25.3m in net additional loans both in Slovenia and abroad, which is a third of the value of net additional loans they took out last year.

Meanwhile, Slovenian households secured the highest amount of net additional loans this year in July, but the total net loans taken out in the first seven months were down by more than 50% compared to the same period last year.

Banks paid off the total of EUR 1.1bn in foreign debt in the first six months of the year, which is up by a third from the same period last year.

The quality of banks' operating capital continues to deteriorate, as bad claims reached 4.3% of all claims at the end of June. In the first seven months of the year, banks registered EUR 357.1m in provisions and write-downs, which is up 7.4% year-on-year, the IMAD said.

Data from the Finance Ministry put the general government deficit for the first five months of 2011 at EUR 901m, with revenue and spending going up by 10.6% and 3%, respectively.

Public spending was higher in all categories year-on-year, bar investments and investment transfers (-8.7%), which decreased due to lower investment activities of the government this year.

The fastest growth in spending was registered in interest costs (+9.5%).

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