The Slovenia Times

FinMin Expects Growth to Outpace 2.4% Forecast


The latest data showing Slovenia's GDP expanded by 3% in 2014 and by 2.7% in the first half of this year is both encouraging but also a burden, Mramor assessed on the margins of the Bled Strategic Forum.

As some public investments were delayed in the first half of the year, growth is expected to chug along in the second half with the help of a rise in investments. This should ensure that the country grows by more than the forecast 2.4%, said Mramor.

"We're also seeing a rise in consumer borrowing, although business is not exhibiting this trend as yet," the finance minister said.

"The structural reforms we have carried out...are producing better results than we expected," he said, warning of the danger of growing appetites for a rise in spending and a loosening in the reform drive.

At stake now is "whether Slovenia will raise pay by distributing the effects of growth...or allow for this to be channelled into new jobs, especially for young people," he assessed.

He warned that Slovenia still had to walk the path of reforms given its budget deficit, which needed to be reduced in order to bring down the interest burden on public finances. "We must stick to the current path...This will produce a result in 2019 or 2020, when the country will have eliminated its excess deficit."

An emerging concern is the danger presented by a slowdown in the Chinese economy. Mramor assessed that the danger "is real" and that it "could cause a cooling of demand for products for which Slovenia is supplier of intermediate parts."

This could affect growth in 2016, which is already projected to be lower than this year, he said.


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