38th regular meeting of the Government of the Republic of Slovenia
The implementation of the three-pillar Strategy for the Development of the Capital Market in Slovenia by 2030 will help place the Slovenian capital market in the circle of successful European capital markets. A well-developed capital market can benefit both businesses, particularly small and medium-sized enterprises (SMEs), and private individuals. It can provide better access to financing, particularly for SMEs, which is extremely important for this segment, especially in the current climate of poorer access to bank funds. The strategy measures can stimulate the development of existing and the starting up of new technological and innovative SMEs with a high potential for fast and sustainable growth, on which the Slovenian economy could be based in the future. Placing a greater emphasis on financial education can also open up opportunities on the capital market for retail investors. Furthermore, promoting the issuing of lower-risk financial instruments for this segment can create a more attractive investment environment for retail investors to build up their savings in a cost-effective manner.
The Government took note of the Spring Forecast, which projects economic growth to be much more moderate this year, though higher than predicted in the Autumn Forecast, and a gradual fall in inflation after relatively high rates in the first few months of 2023. Since autumn, uncertainty concerning energy supply and price fluctuations has decreased and the outlook for economic growth in major trading partners has improved accordingly. However, growth will be significantly lower than in 2022, not only this year but also in the following two years. Economic growth in Slovenia will moderate (to 1.8%) but will be higher than predicted in the Autumn Forecast (1.4%). The Institute of Macroeconomic Analysis and Development expects a continued moderate growth in investment, supported by public and EU funds, and a modest growth in private consumption and exports, which will again record a faster rate of increase in the second half of the year. Due to lower uncertainty in the international environment, risks to the realisation of the forecast are less pronounced and more balanced than a few months ago. Nevertheless, uncertainty remains high and is particularly tied to the progression of the war in Ukraine and energy market conditions.
This year should see a gradual moderation of inflation, though it will remain relatively high (averaging 7.1%), mostly due to high rates at the beginning of the year. In the absence of external shocks and supported by monetary measures, inflation will continue to slow next year. However, it is expected to come close to 2% only after 2024.