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Slovenia's Q3 growth beats forecasts, Melania factor boosts tourism
November 30, 2016 / 12:46 PM / a year ago

Slovenia's Q3 growth beats forecasts, Melania factor boosts tourism

* Growth up 2.7 pct yearly in third quarter

* Exports - including tourism - rise 5.4 pct

* Melania-factor lifts U.S. visitor numbers

By Marja Novak

LJUBLJANA, Nov 30 (Reuters) - Slovenia beat forecasts with 1 percent growth in the third quarter compared to the 2015 quarter - its strongest quarterly growth for more than two years - boosted by consumer spending and exports, including tourism, data showed on Wednesday.

Tourist overnight stays rose 13 percent in month-on-month in October and, while most tourists were from Italy, Austria and Germany, U.S. visitor numbers to the homeland of future First Lady Melania Trump rose 11 percent in the first ten months.

GDP rose 2.7 percent compared with the same quarter of 2015, as exports rose by 5.4 percent year-on-year and household spending by 2.6 percent, the statistics office said. Investment fell by 0.4 percent, mainly due to a smaller inflow of EU funds.

“The GDP figures are excellent and above expectations. It is likely that similar growth will continue in the last quarter of the year which means that full year growth will be higher than forecast by domestic and international institutions,” Dezelna Banka’s treasury executive, Iztok Trobec, said.

He said 2016 GDP growth might be about 2.7 percent, well above the government and International Monetary Fund forecasts of 2.3 percent. The European Commission forecast is 2.2 percent.

“Export of products and services is rising, the tourist numbers are good as more tourists visit Europe amid terrorist scares elsewhere, while domestic spending is also up due to better employment figures,” Trobec said.

Slovenia exports about 70 percent of what it produces, mainly to other EU states. Main exports include cars and car parts, household appliances and pharmaceuticals.

The statistics office also said Slovenia’s inflation reached 0.7 percent year-on-year in November versus deflation of 0.9 percent in the same month last year and analysts said inflation in Slovenia and the euro zone might get close to 2 percent, the European Central Bank’s target in 2018.

They also said GDP growth next year might accelerate further, particularly since more EU fund inflows are expected and that would boost investment.

Slovenia, which narrowly avoided an international bailout for its banks in 2013, returned to growth in 2014 and the government expects the economy to expand by 2.9 percent in 2017. (Editing by Louise Ireland)

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