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The Biggest Drop In Industrial Production In The EU

According to Eurostat, Slovenia recorded the biggest fall in industrial production at the European Union level in December. In his article, Bojan Ivanc, the chief economist of the Chamber of Commerce and Industry, wrote that this was “a dark December for Slovenian industry”. But this is not surprising, according to political analyst Sebastjan Jeretič, who argues that the left-wing government has been adopting “anti-economic” measures all along and that Prime Minister Golob is not the economic genius he has been portrayed as by the media.

In December, Slovenia recorded the biggest drop in industrial production among European Union countries, with 7.4 percent on a monthly basis and 10.2 percent on an annual basis. The Golob government is not taking the warnings of the economy seriously, and thus, what they expected is now actually happening, according to expert and analyst Sebastjan Jeretič. He also warned of the scenario that awaits us in the future if things do not improve.

“The economy has basically been warning all last year about the decline of our industry due to inadequate government policies,” Jeretič said, explaining that the government is doing this in two ways, through regulation and through political communication.

“The very words that the government is saying are actions that affect the economy, especially the international aspect of the economy in relation to foreign investors and partners, who need to be guaranteed a certain level of reliability, even when they do business with Slovenian companies,” the analyst explained, stressing that “this government, at the level of discourse and actions, has done a series of stupid things that are destroying the Slovenian economy.” Jeretič is referring not only to the recording of work times and taxation, but to a series of measures which, in his words, show the overall “anti-economic attitude of this left-wing government.”

As he said, the Golob government is creating a negative economic climate through both regulation and words, which is extremely problematic in these times. He believes that this is also where it differs from the previous government, which worked under more difficult conditions. Jeretič admits that today’s conditions are not ideal either, but that the government has time to deal with them.

“In the previous mandate, the government had to fight an epidemic and other unforeseen factors – and it still managed to run the second most successful economic policy in the world. And these are the OECD’s findings, not those of the Institute of Macroeconomic Analysis and Development (UMAR) or any other Slovenian body,” he was clear. He added that much depended on how the government acted in an open international economy in general. Jeretič sees a huge difference between the previous and the current government, which will be visible in the years to come. “The state coffers will be empty – not only because of the squandering of money, but also because the budget will not be filled. You can raise the tax rate to a billion, but if there are no profits, if there are only losses, it doesn’t help you,” he added.

Golob was never a top manager

Jeretič also explained that Prime Minister Robert Golob clearly does not understand the basics and the importance of the economy for taxes, even though the media presented him as a “top manager”, and he pointed out that this was clearly a “false representation.”

“He was obviously not a top manager, but he was working in an activity where the context of the activity is completely different,” Jeretič explained, adding that “if he has gained some kind of privilege in selling state electricity on account of past political steps, this is one specific requirement of a manager to make an efficient system, which is not related to most other economic activities.”

In the weekly column “Izpod peresa” (From the Pen), the Chief Economist of the Chamber of Commerce and Industry, Bojan Ivanc, writes: “December’s data on industrial production in manufacturing were markedly weak and below expectations, with industrial production falling by 3 percent, much more than we had expected (-1 percent), completely reversing the growth of the previous three months and settling at its lowest point since August 2023 and before that in January 2021. Also noteworthy is the negative revision of the November data, which was historically one of the highest, as growth was not 4.7 percent, as was the correct estimate, but almost non-existent (+0.1 percent).”

“The main contributors to the fall in industrial production in December were a fall (-18 percent) in the production of non-durable consumer goods (pharmaceuticals, which is highly volatile) and machinery and devices (-6.5 percent), while output in the materials industry also contracted by 2.6 percent despite a sharp fall in natural gas prices,” the column said. Ivanc added, among other things, that a modest rise in the euro area manufacturing PMI in January and an expected rebound in pharmaceuticals should lift industrial production growth in January.

Tanja Brkić

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