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Slovenia ups minimum wage by 4.7 percent, firms worried

Kitco News

By Marja Novak

LJUBLJANA, Jan 26 (Reuters) - Slovenia's Labour Minister increased the minimum gross monthly wage in the country by 4.7 percent to 842.79 euros ($1,050), the country's Official Gazette revealed on Friday.

Labour Minister Anja Kopac Mrak had said the increase reflects economic growth in the country although the finance ministry had said earlier in January such an increase would exceed inflation, average wage growth and productivity growth in the past year.

The Chamber of Commerce and Industry said on Thursday the increase would be "a shock to the system", adding the minimum wage should rise by a maximum 2.6 percent which was the average wage growth last year.

"With such an increase of the minimum wage the cost of the employee (on a minimum wage) for companies will rise by 5.3 percent... That is a significant rise of labour costs that will have a negative impact on companies' competitiveness," the chamber said in a statement.

It said wood, textile and a part of metal industry will suffer most as their value added per employee is low. According to the chamber some 33,000 employees are paid the minimum wage in Slovenia.

Slovenia, which narrowly avoided an international bailout for its banks in 2013, returned to growth a year later and the government expects the economy to expand by 3.9 percent this year versus 4.4 percent in 2017, boosted by exports and investments.

The centre-left government is under strong pressure from public sector trade unions to lift wages as the country prepares for parliamentary election which is expected in June.

On Wednesday some 30,000 public servants staged a one-day strike while separate strikes of policemen, nurses and teachers are expected in February unless the government increases wages significantly by then. The government said most demands for higher wages are not acceptable as they would threaten the planned fiscal consolidation and could not be justified by increases in productivity and growth.

The government plans a budget surplus of 0.4 percent of GDP this year versus a deficit of 0.8 percent in 2017.

($1 = 0.8023 euros)

(Reporting By Marja Novak)

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