Ljubljana: Slovenia’s economy will contract more than previously estimated this year as exports to Europe slow and consumption falters, the government’s economic institute said.
Gross domestic product will shrink 2 per cent, compared with a 0.9 per cent contraction forecast in March, the institute said in a statement today. GDP is expected to fall 1.4 per cent next year, according to the institute, whose forecasts are used by the government to prepare the budget.
“Slovenia is seeing modest demand for its exports in Europe, while households and the government are spending and will spend much less,” Bostjan Vasle, the institute’s director, told reporters today in the capital, Ljubljana. “If the situation in Europe worsens, then there’s a downside risk to our forecast.”
Slovenia’s economic outlook is worsening as demand for its exports wanes and domestic consumption drops following austerity measures by the government in Ljubljana and others in Europe. Exacerbating the outlook are ailing banks in Slovenia, which rely on funding from the European Central Bank, continue to lower lending and need fresh capital.
