In this guide to Slovenia’s National Debt, we discuss the amount of the debt, who manages it, the country’s assets, and its credit rating.
The National Debt Of Slovenia
The IMF counted the gross national debt-to-GDP ratio of Slovenia as 80.96% in 2020. The country’s net debt-to-GDP ratio worked out at 50.19% for the same period.
- Gross debt counts all the money owed by a government through debt instrument issuances or formal loans.
- Net debt deducts all of the financial assets that the government owns — eg, buildings and works of art are not included for these purposes.
As a member of the EU, Slovenia’s statistics are monitored by Eurostat, which values Slovenia’s debt-to-GDP ratio at 65.6% through 2019.
Eurostat does not include guarantees written by the government for loans to others when it calculates a country’s debt.
On the other hand, the Organization for Economic Co-operation and Development (OECD) does include government guarantees in its debt figures and also the debts of state-owned assets. The OECD calculated Slovenia’s debt-to-GDP ratio for 2019 as 80.9%.
Slovenia’s Financial Crisis
The lowest point in Slovenia’s national debt occurred in 2008, during the global financial crisis.
However, strong growth in the Slovenian economy meant that even though the country ran deficits of up to 4%, its debt-to-GDP ratio still shrank because its GDP grew very quickly.
Response to the Crisis
Slovenia tightened regular government spending to focus on rescuing its banks. The government presented a credible bail-out plan that included manageable debt and state asset sell-offs.
The international investor community approved of the plans, and so, unlike Greece or Cyprus, Slovenia was able to continue to sell government bonds and finance its recovery package.
Who Manages Slovenia’s National Debt?
The Ministry of Finance is responsible for planning the national government’s financial strategy. It created the Central Government Debt Management Department to directly manage the national debt.
Slovenia’s State Assets
Debt-raising is used in coordination with the sale of assets to cover the costs of a country’s recovery. For political reasons, a strategy of using state assets to fund a bank bailout did not get underway until 2012, which is why the Slovenian budget deficit was particularly severe in 2013.
The delay in selling off state assets surprisingly worked in the country’s favor. The value and sale-ability of state businesses have improved since the financial crisis passed.
By putting forward a credible plan with a horizon of 2020, the Central Government Debt Management Department was able to persuade investors to continue buying government debt. It also laid plans for a staged sell-off of government enterprises.
These actions kept required interest rates low and increased the income from asset sales when they eventually sold.
Slovenia’s Credit Rating
Despite having gone through a very severe banking crisis, Slovenia enjoys A-grade credit ratings, as shown in the table below.
Agency Credit Rating Outlook
Standard and Poor's A+ Positive
Moody's Baa1 Stable
Fitch Ratings A- Stable
More Facts About Slovenia’s Debt
- You could wrap $1 bills around the Earth 190 times with the debt amount.
- If you lay $1 bills on top of each other they would make a pile 5,317 km, or 3,304 miles high.
- That's equivalent to 0.01 trips to the Moon.
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