IMF urges privatisation, pension reform in Slovenia
By Marja Novak
LJUBLJANA (Reuters) - Slovenia's economic growth is expected to slow to 1.9 percent in 2016 and reach some 2 percent a year later, the head of the International Monetary Fund (IMF) mission to Slovenia said on Tuesday.
GDP growth will be lower than the 2.9 percent reached last year mainly because of lower investment, which will fall due to lower expected inflow of European funds, Nikolay Kirov Gueorguiev told a news conference.
He also urged Slovenia to speed up privatisation and introduce a pension reform that will gradually raise the retirement age to 67.
At present Slovenians can retire at the age of 59 but that will be gradually raised to 65 by 2019 according to a reform enforced in 2013.
"Given the ageing profile of the Slovenian population ... (a new) pension reform should start as soon as possible," Gueorguiev said.
He said the government privatisation strategy that was adopted last year "calls for the state to retain direct control of too many companies" and urged "a fast and more comprehensive privatisation" which should improve corporate governance in the country and enable higher economic growth in the long run.
In December Slovenia approved a plan to start selling the state's stakes in about 30 companies this year after it had earlier last year decided to keep most energy firms, insurers and many other important firms in state hands in the long run.
Gueorguiev stressed the need for a "timely and well-designed" bank privatisation, saying the government should reconsider its plans to sell only 75 percent of the country's largest bank Nova Ljubljanska Banka (NLB) and prevent any investor holding a stake in the bank that would be bigger than the government's stake of 25 percent.
Finance Minister Dusan Mramor told the same news conference that the conditions for the privatisation of NLB, which is due to start later this year, will be reconsidered and possibly changed in June or July.
Over the past decades Slovenia has been reluctant to sell its major banks and a number of other companies, saying that would be against the national interest.
As a consequence, the country still controls about 60 percent of the banking sector and 50 percent of the economy as a whole.
In 2013 the euro zone member narrowly avoided an international bailout for its banks. The government had to pour more than 3 billion euros into mostly state-owned banks that year to prevent them from collapsing under a large amount of bad loans.
(Reporting by Marja Novak; editing by Adrian Croft)
