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News in Brief Summer 2015

Hidria Strenghtens its Automotive Division

Slovenian automotive supplier Hidria has developed a unique glow plug with an integrated pressure sensor for diesel engines. This sensor could bring up to 30 percent reduction in both fuel consumption and exhaust gas emissions. Hidria has already signed contracts for 110 million euros to supply major producers of diesel engines with the new plug. Diesel ignition systems are one of the key products of Hidria’s automotive division - the other being the development of high-end electric motors for hybrid and electric cars. This year Hidria developed electric motors for the exclusive hybrid edition of the Porsche Spyder 918. The technological corporation, with headquarters in Idirija, developed an electric motor for the Mercedes SLS E-Cell and was also selected to develop solutions for the new generation of hybrid Mercedes C and E-class cars.  

 

Macroeconomy: Relatively Good Times Continue

The latest analysis by the Institute of Macroeconomic Analysis and Development (IMAD) published in June shows that favorable trends continue in 2015. Slovenian gross domestic product (GDP) was 0.8 percent higher in the first quarter of 2015 than in the last quarter of 2014. This means a 2.9 percent growth on a year to year basis. While strong exports continue to be the main driver of recovery, domestic consumption is also up. Construction investment has, on the other hand, slightly slowed down again after being on the rise since mid-2013. Employment figures are also seeing a modest rise. Prices have slowly begun to increase in May, after five months of deflation. 

 

The Government Announced Improved Tax System

In mid-June the Slovenian government announced a set of measures directed to lower the tax burden on labor and reduce administrative obstacles. The tax project was presented by financial minister Dušan Mramor. Currently, Slovenia has rather high taxation of labor and a very steep progression of the personal income tax. This puts heavy burden on the best performing and best educated employees in particular. which in turn negatively affects the competitiveness of Slovenian enterprises.  Mramor promises a more favorable labor tax system to be put into practice in 2017. At the same time the new system should significantly improve tax collection. The new real estate tax should also be implemented for the first time in 2017.  

 

The Program to Step-up the Internalization of the Slovenian Economy

The new internalization 2015-2020 program adopted by the Slovenian government in June focuses both on the internalization of Slovenian companies and on foreign direct investments. The strategic goals of the program are to increase the value of exports by 5% annually, to increase GDP per capita by 2-3% annually, the share of exports in GDP per capita by 2% annually; increase exports to non-European markets by 5% annually; and to at least preserve the share of incoming FDI in GDP. More specifically, the value of direct foreign investments should grow annually by four percent.  The program also defines Slovenia's target markets and divides them into three groups: priority markets which are globally significant, yet do not have a strong Slovenian presence (for example, the USA or Japan), traditional markets (Europe with Western Balkans and Russia) and prospective markets, with strong opportunities for the future (China, Gulf States, Central Asia and India).

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