March 17, 2020 / 2:42 PM / 13 days ago

Slovenia's plan for balanced public finances likely upended by coronavirus

LJUBLJANA, March 17 (Reuters) - Slovenia will probably have to shelve plans to keep public finances balanced in the medium term due to the economic blow wrought by the coronavirus outbreak, a government advisory body said on Tuesday.

The Fiscal Council said it expected higher budgetary spending on decrees aimed at stemming the spread of the virus and reducing its impact on the economy, while tax receipts were sure to decline as economic activity slows.

The small southeastern European country, an EU member state, had charted a budget surplus of 0.8% of GDP this year, on a par with 2019. But the new centre-right government, confirmed last week, said it would in coming months amend the budget blueprint to cover expenses imposed by the coronvirus crisis.

Slovenia, an European Union member, has so far confirmed 273 coronavirus cases, of which one person has died.

Later on Tuesday, Slovenia’s largest exporter, Revoz, a unit of French Renault, which employs about 3,400 people, will halt production due to coronavirus.

Other companies have closed for lack of parts due to supply chain disruptions and a lack of workers after the closure of all public transport on Monday to minimise tranmission of the virus.

Slovenia has also shut down air traffic, all schools and kindergartens, hotels, bars, restaurants and most shops, apart from those selling food.

It has limited the number of border crossings with Italy, which is suffering the world’s second worst outbreak of coronavirus with more than 2,000 dead, and introduced health checks there.

The government’s macroeconomic institute UMAR expects economic growth of 1.5% this year, down from 2.4% in 2019, providing that conditions stabilise in the second half of the year. (Reporting by Marja Novak Editing by Mark Heinrich)

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