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Slovenia: Recession Goes On

Published: September 2, 2013; 06:33 · (Vindobona)

In the second quarter, Slovenia´s GDP was down by 1.7% year on year. This year, Slovenia´s GDP will fall by 3.0%, economists say.

Slovenia: Recession Goes On / Picture: © Vindobona.org

Compared to the reference period of 2012, the economic growth reached -1.7% in the second quarter. In the first six months of 2013, Slovenia´s GDP contracted by 3.2%.

Slovenia´s weak point is still the shrinking domestic demand. From April to June, domestic demand was down by 2.0% year on year. The decrease decelerates, however. In the first quarter, the annual change was -3.2%.

Furthermore, the strict austerity package leaves deep traces in Slovenia´s economic performance. The country resolved to privatize 15 major publicly held companies. In the first six months, public expenses decreased by 3.1%. Nevertheless, Slovenia still fights against a bail-out by the IMF. This year, the budget deficit will come at 7.0% of GDP, economists forecast.

The only growth signal came from the exporting industrial sector. In the first half of 2013, exports were up by 2.0%. Imports were down by 0.1% in the same period.

Like Croatia, the economic growth between 1995 and 2007 was mainly based on consumption and construction. Above all, the Slovenian banking sector is substantially inflated. The NPL volume comes at 30% of the country´s GDP: Obviously, Slovenia´s government is still overstrained with the restructuring of the banking sector. Slovenia will leave the recession behind in 2015 by earliest, economists forecast.

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