The country's real estate and energy sectors remain rather resilient, but a crisis is looming in Slovenia’s public sector, according to Kavcic, Bracun & Partners Partner Simon Bracun.
"Recently, there has been controversy about pay grades in the public sector," Bracun begins. "The current pay grades in the public sector have been deemed to be insufficient, causing worries among different pay groups and the possibility of strikes." According to him, the government plans to revise the current system, which will have an impact on costs and public expenses. "One group in the public sector – doctors and employees in the health system in general – is particularly insistent on the changes to public sector pay grades," he adds. "The government has also announced the introduction of certain changes in taxation, causing speculation on what effects this might have on the economy."
Despite that fracas, Bracun highlights some recent interesting developments in real estate. "The real estate industry has experienced growth over the past five years, with numerous successful real estate projects closing and ongoing in and around Ljubljana," he points out. "However, the latest inflation and rising interest rates have led to a decrease in housing loans, with the curve of new loans declining in the last quarter. This has affected buyers and might cause the real estate market to cool down a bit, although not as drastically and as fast as in other countries. In Ljubljana, the median price has slightly fallen in the last quarter and there are fewer real estate transactions compared to previous months." According to him, "despite these changes, there are still many interesting real estate projects and we believe that the Slovenian real estate market could stay resilient."
Bracun adds that energy in Europe is still being affected by the war. "Slovenia was no different to other EU countries and the government has taken several measures to address the situation," he notes. "Government interventions and a milder-than-average winter have helped the economy to maintain stability and it is less likely that Slovenia could quickly enter into a recession. However, there is still a lingering fear of what will happen with prices when the subsidies and price caps are removed."
"The government has taken some legal actions to provide aid and mitigate the impact on companies," Bracun continues. "With the Act on the Aid to the Economy to Mitigate the Effects of the Energy Crisis, subsidies are being provided to almost the whole economy, with the stipulation that the largest companies receiving subsidies must invest in reducing their carbon footprint and protecting the environment. The government is also promoting the use of renewable energy sources, with subsidies for installations for the production of electricity or the storage of electricity or thermal energy with an installed capacity of between 50 kilowatts and one megawatt, for the production of renewable hydrogen and biogas and biomethane from waste, and certain community projects."
Finally, Bracun highlights that there have been a few new laws introduced in the past few months. "The Personal Data Protection Act, which was discussed for many years, has been renovated and implemented with all the EU GDPR conditions," he notes, adding that, unfortunately, there are already many public debates about what is allowed and what is not. "The Competition Act has been updated and certain EU directives have been transposed, leading to an evolution of the procedures before the Slovenian authority, which now has more power," he notes. "Additionally, the recently adopted Consumer Protection Act finally (correctly) transposed the EU directives."