(Adds details, background)
By Marja Novak
LJUBLJANA, Jan 16 (Reuters) - The Slovenian government will have to resist pressure to increase spending if it is to reach its planned budget surplus of 0.4 percent of GDP in 2018, the central bank said on Tuesday.
The bank said in a report that even though positive economic forecasts point to a rise in revenues, the government would have to "actively strive" to reach the planned surplus because pressures to significantly increase spending had been strengthening.
A number of public sector trade unions are planning strikes, demanding higher wages amid strong economic growth which reached some 4.4 percent in 2017 while the government expect GDP growth of 3.9 percent this year.
The government said last week most demands for wage hikes were not acceptable as they could not be justified by increases in productivity and growth and would threaten the fiscal consolidation. Last year Slovenia ran a budget deficit of about 0.8 percent of GDP.
Labour Minister Anja Kopac Mrak has proposed that the minimal gross monthly wage be raised by 4.7 percent to 843 euros ($1,030) but the finance ministry says this would exceed 2017 inflation, wage and productivity growth.
Analysts said wage demands are partly the result of the fact that trade unions hope the centre-left government might be more generous ahead of a parliamentary election expected in June.
The central bank also said the rise in investment in the third quarter was "surprisingly low" compared to GDP growth but added that the slowdown might only be temporary since conditions for investing were very favourable.
It said that the economic growth cycle seemed to be continuing considering data on business sentiment and new orders.
Investments in the third quarter rose by 1.9 percent versus a rise of 7.5 percent in the second one. GDP growth in the third quarter reached 4.5 percent versus 4.6 percent in the previous quarter.
In November Slovenia's business sentiment reached the highest level in 10 years for the second month in a row amid growing confidence in the manufacturing, services and retail sectors. The sentiment remained unchanged in December.
The central bank also said the increase of Slovenia's annual inflation to 1.9 percent in December from 0.6 percent a year before was mainly a result of higher global oil prices.
($1 = 0.8178 euros)
(Reporting by Marja Novak; Editing by Richard Balmforth)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.