* Slovenia narrowly avoided EU/IMF bailout in December
* All eyes on sale of state assets
* PM challenges forecasts of further GDP contraction
By Almir Demirovic
LJUBLJANA, Jan 27 Slovenia's sickly economy can
grow this year, Prime Minister Alenka Bratusek said,
contradicting most expectations of a further contraction
following a government bank rescue.
In comments emailed to Reuters, Bratusek said that after
narrowly avoiding a bailout by its European peers in December,
her government had turned its attentions to reviving the
"I know some forecasts for Slovenia still do not expect
economic growth, but forecasts change," Bratusek wrote in
response to questions over the weekend.
"Already last year in the third and fourth quarters we did
not see a decline in GDP (gross domestic product). This data
gives me hope that we will have minimal growth this year."
Responding to market concern about possible backsliding on
privatisation, Bratusek said there was a "detailed timetable"
for the sale of 14 companies that had not yet been made public.
The IMF said this month it expects Slovenia's national
output to shrink 1.1 percent in 2014, less than previously
feared, as the government tries to cut spending and remake an
economy still 50 percent in state hands.
The government's own macroeconomic institute is predicting a
0.8 percent decline.
The recession, however, is easing, to a 0.3 percent
contraction quarter-on-quarter from April to June and flat
output in the third quarter. Fourth quarter data has yet to be
Bratusek's government has come to the rescue of Slovenia's
mainly state-owned banks, ring-fencing billions of euros in bad
loans and plugging the difference with cash injections to keep
It plans to sell at least a dozen state-controlled
companies, including No.2 lender Nova KBM, national
airline Adria Airways, Ljubljana international airport and
But Bratusek faces resistance from some in her disparate
coalition to the sale of prized state assets that for years have
been considered sacrosanct in Slovenia, which unlike the rest of
ex-communist Eastern Europe resisted an influx of Western
capital after the end of the Cold War.
In the past week, rating agencies Standard & Poor's and
Moody's have affirmed Slovenia's sovereign ratings after a run
of downgrades last year. Moody's lifted its outlook for the
country from negative to stable, though both agencies warned of
the need to carry out promised reforms.
"Transparency is the key word in privatisation, but
disclosing certain information could affect the price that we
expect from the sale," Bratusek wrote of the privatisation
"We do not want to sell to the first bidder who comes along.
We will be guided by the strategic interest of the partner and
the highest possible price. If it looks like the buyer would
purchase a company just to sell it piecemeal or destroy it, we
won't sell it."
When the global economic downturn struck, Slovenia's vital
exports hit a wall, driving the economy into two recessions
since 2009 and exposing a system of crony capitalism that left
banks vulnerable to spiralling toxic debt.
"We are aware that after the first fire-fighting measures,
our job is only just beginning," Bratusek said.
"Slovenia is not completely out of the financial/economic
crisis and now we must make sure we attain the goals we set for
(Additional reporting by Zoran Radosavljevic in ZAGREB; Writing
by Matt Robinson; Editing by Ruth Pitchford)