September 17 (SeeNews) - The formation of Slovenia's new center-left minority government should have limited implications on the economy, although its quite wide coalition format with a thin majority could impede the reform pipeline and alignment on more tricky items, the Erste Group said.
"Implications for the economy should remain limited, while we await the 2019 budget to see the extent to which pre-election promises would burden the thus-far sound fiscal position," Erste said in a short note on Slovenia on Friday.
Slovenia recorded a budget surplus of 68.1 million euro ($78.8 million) in the first seven months of 2018, compared to a deficit of 109 million euro in the like period last year, the finance ministry said earlier this month. According to estimates, the budget surplus could reach 227 million euro at the end of 2018, with revenues predicted at 9.71 billion euro and expenditures at 9.48 billion euro.
On Thursday, Slovenia's parliament approved the new government, with Marjan Sarec, a former provincial mayor, comedian and actor, as prime minister. Sarec's center-left coalition of five parties, Slovenia's first minority government since independence, was endorsed by 45 deputies in the 90-seat parliament following an inconclusive June general election.
Sarec's government already has two hot topics on the table, Erste said. First, the appointment of the next central bank governor, who is yet to be nominated by president Borut Pahor, and second, the sale of the country's largest lender, Nova Ljubljanska Banka d.d. (NLB).
Slovenia's June general election saw the Slovenian Democratic Party (SDS) led by nationalist former prime minister Janez Jansa win 24.92% of the vote, giving it 25 seats in the National Assembly. Despite winning the most votes SDS failed to form a coalition. Prior to the elections all parties but NSi and SNS said they refused to work with SDS, effectively blocking Jansa from power.
The cabinet is made up of representatives of centre-left LMS party led by Sarec, the Social Democrats (SD), the Modern Center Party (SMC), the Alenka Bratusek Party (SAB) and the Democratic Party of Pensioners of Slovenia (DeSUS). Sarec was also supported by the Left party which will remain in opposition.
LMS is the second-biggest force in parliament following the June election.