(Updates with quotes, details on bank performance)
By Marja Novak
LJUBLJANA Jan 10 Slovenia should continue to
curb public spending as economic indicators improve, in order to
meet its fiscal goals, which include reducing the budget
deficit, the central bank said on Tuesday.
"Over the past months the pressure of various interest
groups on public spending has strongly increased, which could
make it difficult to meet fiscal goals if economic conditions
worsen compared to what is expected at the moment," the bank
said in a statement after its board meeting.
The central bank also said local banks had a joint pre-tax
profit of 362 million euros in the first 10 months in 2016,
which is 54 percent higher than in the same period of the
previous year, mainly due to lower provisions for bad loans.
Banks managed to reduce loans whose repayment had been
delayed by 90 days or more to 6.3 percent of all loans in
October from 6.4 percent in September, the central bank said.
Earlier on Tuesday, the government's macroeconomic institute
reported that corporate loans by local banks fell by 11 percent
year-on-year in November in spite of favourable economic
Slovenia, which narrowly avoided an international bailout
for its banks in 2013, returned to growth in 2014, and the
government now expects the economy to expand 2.9 percent in
2017, compared with 2.3 percent last year.
Favourable economic forecasts have led public-sector trade
unions to demand wage increases, and pensioners are pressing for
pensions to be raised.
In December, the government agreed to increase public-sector
wages by 3.8 percent this year. Wage talks with
doctors' trade unions continue after doctors staged a partial
two-week strike in November.
The central bank also said prospects for export growth
remain encouraging in 2017. Slovenian growth exceeds that of
most other eurozone states, it said, mostly because of the
competitiveness of its export sector.
Slovenia exports about 70 percent of its production, mainly
to other EU states. Exports include cars, car parts,
pharmaceutical products and household appliances.
In line with European Commission's demands, Slovenia hopes
to reduce its budget deficit to 1.7 percent of gross domestic
product this year from about 2.2 percent in 2016 and bring it to
zero by the end of 2020.
(Reporting By Marja Novak, editing by Larry King)