The Slovenian central bank remains under pressure to change its mind after it has recently introduced rules that severely limit consumer and housing loans, raising fears that the impact on economic growth could be significant right as economic growth starts to cool off.
“At a time when the economy is cooling, we have to find ways to promote the circulation of money,” Prime Minister Marjan Šarec said on the margins of an EU meeting on cohesion policy in Prague.
Šarec said the lending restrictions, which are estimated to affect some 300,000 individuals, could shave 0.3 percentage points off economic growth.
He voiced the hope that Banka Slovenije and its governor, Boštjan Vasle, would take a step back. “In politics we have to take a step back as well, and Vasle now has the opportunity to do that and show he cares about the government’s opinion and the opinion of the citizens.”
Šarec also said that his party had not endorsed Vasle for governor, having had second thoughts about his stint as the director of IMAD, the government’s macroeconomic forecaster, which he said often underrated growth.
The prime minister’s statement came just hours after IMAD acknowledged the lending curbs would affect growth. However, it said the impact on consumer spending would be offset by recently adopted tax cuts. “The latest tax changes will have a positive impact on consumption,” it said.
The central bank has been under pressure since announcing in mid-October that the crediting of households had to be restricted in order to protect the stability of the financial system, since banks have been playing loose with crediting rules and let people overleverage.
Deflecting criticism, the central bank and Governor Vasle have said they were sticking to the new rules.