The Slovenia Times

Central Bank Downgrades GDP Forecast

Nekategorizirano

7


In April, the central bank projected a 1.9% drop for this year, but 0.5% growth for the next.

The projections for 2013 and 2014 are worse than those by the government forecaster IMAD, which a week ago preserved its 2013 figure at -2.4%, but downgraded that for next year to -0.8%.

However, the central bank is more optimistic than IMAD in projecting growth for 2015: its figure of +1.4% is far above IMAD's more moderate 0.4% growth forecast.

"Slovenia is among the few countries that will be in recession next year. The level of economic activity in 2015 will be around 10% lower than before the crisis," Aleš Delakorda of the central bank's analysis department told the press on Tuesday.

He said Banka Slovenije supported that fiscal measures announced in the budget for the coming two years. "The budget causes additional contraction to the least possible extent, while it at the same time has the smallest possible negative impact on the export sector," Delakorda argued.

The central bank stresses the need to stabilise the fiscal framework, urging labour market measures that will end the high unemployment, especially structural employment.

Among the risks that could alter the latest Banka Slovenije forecast, Delakorda mentioned the fiscal consolidation commitments given and the clean-up costs in the banking sector. Access to credit, long-term unemployment trends and foreign demand are also key elements.

Poor domestic demand continues to significantly undermine the economy, while a very positive contribution is export figures, although banks paying back foreign debt spend a large chunk of the trade surplus.

Delakorda moreover pointed to the high debt level of companies, especially in construction and among financial holdings. Manufacturing and households have less debt problems, which is an "indicator of rational behaviour".

Share:

More from Nekategorizirano