Slovenian central bank slashes growth forecasts
LJUBLJANA Oct 8 (Reuters) - Slovenia's economy is expected to shrink by 2.6 percent this year, the country's central bank said on Tuesday, revising down its growth forecasts significantly for this year and next.
Slovenia is in the middle of overhauling its local banks, which are nursing an estimated 7.9 billion euros ($10.7 billion)of bad loans - equal to 22.5 percent of gross domestic product.
How much capital exactly will be needed to clean up the banking sector will be revealed in November when the results of the external stress tests are due.
The Slovenian central bank said it now expects GDP to fall 2.6 percent this year, more than the April forecast of 1.9 percent decrease. It also expects the economy to contract further next year, by 0.7 percent, having earlier forecast 0.5 percent growth.
In 2015, the Slovenian economy is still expected to grow 1.4 percent, the central bank said. ($1 = 0.7368 euros) (Reporting by Marja Novak)
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