July 20, 2020 / 1:09 PM / 19 days ago

OECD urges Slovenia to introduce pension and labour reforms

FILE PHOTO: The Organisation for Economic Co-operation and Development (OECD) Secretary General Angel Gurria arrives for a summit in Biarritz, France August 25, 2019. Ludovic Marin/Pool via REUTERS/File Photo

BRDO PRI KRANJU, Slovenia (Reuters) - Slovenia should introduce pension and labour reforms, reduce barriers to competition and foreign investment and press on with privatisation, the Organisation for Economic Co-operation and Development said on Monday.

Presenting an OECD survey on Slovenia to a conference in which he participated virtually, OECD Secretary General Angel Gurria also said the small Alpine country should increase productivity growth.

Slovenia has dealt well with the coronavirus pandemic but economic reforms will be needed once COVID-19 is overcome, he said.

“It is vital now to stay on track, to stand ready to provide further support where needed to restore growth and then continue with measures to tackle the long-term economic challenges of an ageing population,” Gurria said.

The OECD recommended raising the retirement age to 67 and urged Slovenia to link any future increases to life expectancy. Slovenians can currently retire from the age of 60.

The OECD said Slovenia should improve the efficiency of its public health system and increase the flexibility of its labour market. It recommended reducing taxes on labour and bolstering property taxation instead, and urged stronger governance of state-owned firms.

The OECD confirmed its June forecast that Slovenia’s GDP this year would fall by 7.8%, and rise by 4.5% next year, provided there is not a major second wave of COVID-19.

Labour Minister Janez Cigler Kralj told the conference at Brdo Pri Kranju, north of the capital Ljubljana, that Slovenia aimed to find ways to keep elderly people on the labour market longer but did not say when the retirement age would be raised.

The government has spent more than 1 billion euros (908.66 million pounds) to help companies and people cope with the economic impact of COVID-19. Slovenia has reported 1,953 coronavirus cases and 113 deaths from the virus.

Editing by Timothy Heritage

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