Press Release No. 16/454

Statement by First Deputy Managing Director David Lipton on Slovenia

October 9, 2016

Mr. David Lipton, First Deputy Managing Director of the International Monetary Fund (IMF), met today with Bank of Slovenia Governor Bostjan Jazbec, on the sidelines of the IMF-World Bank Annual Meetings in Washington, DC. At the conclusion of the meeting, Mr. Lipton made the following statement:

“Our current assessment is that, while growth has returned, Slovenia could grow faster and more sustainably with further reforms. Swift policy actions, including in the financial sector, are needed to stimulate private investment and reduce vulnerabilities.

“I commended Bank of Slovenia, which together with the Ministry of Finance led the work on the 2013 bank diagnostic exercise and subsequent recapitalization that played a critical role in bringing the country back from the brink of a crisis. These steps restored confidence in the financial system and set the conditions for a sustained economic recovery.

“These efforts must continue. Privatization of the recapitalized banks will foster their development and allow partial recouping of the public funds. It is also time to decisively deal with bank Non Performing Loans (NPLs), especially to small and medium enterprises (SMEs): the guidelines for resolution of NPLs to SMEs prepared by the Bank of Slovenia and the Bank Association should be swiftly implemented to facilitate resumption of bank lending and contribute to raising investment, economic growth, and employment.

“In this context, we also discussed the principles of central bank independence and non-interference with the central bank’s execution of its duties, which the IMF strongly supports. Respect for these principles is important to ensure continued confidence in the economy.”