* Exports up 9.8 percent year-on-year
* Unemployment at 20-year high; bad loans rise further
* Bond yields rising
By Marja Novak
LJUBLJANA, June 7 Exports in Slovenia rose
almost 10 percent year-on-year in April, data showed on Friday
in a rare sign of economic strength in the euro zone country
which is struggling to avert a bailout.
However, bad loans in local banks - the root of the
government's problems - inched up in the first four months of
the year, and unemployment hit a 20-year high of 11.1 percent in
the first quarter.
Monthly export growth of 9.8 percent was the highest since
August 2011, the state macroeconomic institute said. Exports in
the first four months rose 3.5 percent.
Bad loans rose by 185 million euros ($244 million) but their
rise was some 25 percent lower than in the same period last
year, the institute said.
Local lenders, most of them state-owned, are saddled with
some 7 billion euros of bad loans, drawing comparisons with
Cyprus and its need for a bailout.
The export rise "will help the economy although I expect
export growth to slow down a bit in the coming months," said
Saso Stanovnik, chief economist at investment firm Alta Invest.
"Exports will not be able to entirely offset the fall of
domestic consumption so I believe the economy will fall by some
2 percent this year and by up to 0.5 percent in 2014," he added.
The government hopes the economy will grow 0.2 percent in
2014 after an expected fall of 1.9 percent this year.
Slovenia exports 70 percent of its production, mostly to
other European Union states.
The European Commission gave the country until 2015 to bring
its budget deficit to below 3 percent of GDP. This year's budget
gap is expected to widen to 7.9 percent of GDP as the state will
need to inject capital into local banks to keep them afloat.
The country bought time in May by raising $3.5 billion by
selling bonds. It will have to raise more in the first quarter
of 2014 before a 1.5 billion euro bond expires on April 2.
The yield for the benchmark 10-year euro bond has continued
rising and reached 6.48 percent on Friday, up from 6.42 percent
a day before, according to Reuters data.
"Yields are rising because the government has not yet acted
on its promises to start privatisation and clean up the banking
sector," said Mihael Zagrajsek of Raiffeisen Bank.
The government plans to sell 15 firms later this year but
has yet to get an approval from parliament, while the newly
established bad bank, which will take over most bad loans from
state banks, is expected to become operational at the end of
($1 = 0.7579 euros)
(Reporting By Marja Novak; editing by Zoran Radosavljevic and