Public Expenditure in Slovenia: Past Trends and Current Issues
40 Pages Posted: 8 Mar 2012
Date Written: March 31, 2005
Expenditure developments in Slovenia are discussed by Strojan Kastelec. After describing the main trends observed since the early Nineties, the Author evaluates the impact of population ageing. After 1992, social security payments and wages have shown the highest growth rates while investment spending has been relatively stable. In the coming decades, population ageing will have a relevant impact on health and pension outlays. Projections taking into account demographic trends and the provisions introduced by the reform enacted in 2000, show that the replacement rate and the support ratio will display significant reductions. Notwithstanding this, a growing deficit for the pension fund is expected; the deficit would increase up to 5 per cent of GDP in 2050. The decrease in the replacement rate could lead to concerns on the pensioners’ welfare, raising the issue of the need of supplementary funded pension schemes. If the replacement rate were to be kept constant at the 2004 level, the projected deficit would double.
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