EBRD substantially downgrades economic forecast for Slovenia
The EBRD wrote that the Slovenian economy had already started to cool in 2019. A hard recession followed this year, mostly due to lockdown measures and disruptions in global supply chains.
In the first quarter of the year GDP was down 2.5% at the annual level, which the EBRD noted was one of the biggest drops in the region. In the second quarter, when the coronacrisis hit fully, the contraction almost reached 13%.
The EBRD pointed out Slovenia's economy had been disproportionally affected in particular because of the slump in global trade. Exports, which usually generate 70% of the country's GDP, fell by 12% in the first half of the year.
The second major sector is tourism, which usually accounts for 7% of GDP. Tourist arrivals fell by around 80% in the first six months, the EBRD said.
Thus Slovenia's economy contracted by 8.3% in the first half of the year. Unemployment however grew moderately, by 4.7%, which is mostly the result of stimulus measures. The public finance deficit is expected to reach 9.3% after stimulus measures were adopted worth around 13% of GDP.
The EBRD meanwhile stressed that many risks are associated with the forecast for this and next year. As a small and open economy Slovenia is very exposed to economic developments in its key trade partners, in particular large economies in the eurozone, the EBRD wrote.