September 4, 2019 / 11:40 AM / 17 days ago

Slovenia c.bank sees low economic growth in coming months

LJUBLJANA, Sept 4 (Reuters) - Slovenian central bank expects low economic growth to continue throughout this year due to slowdown in the rest of the eurozone, adding prospect for the export sector “have worsened significantly” in the summer.

The bank also pointed out in a report on Wednesday that Slovenia’s August inflation was “well above expectations”. Last week the statistics office reported that inflation reached 2.4% year-on-year in August versus 2% a month before.

Slovenian gross domestic product (GDP) rose by 0.2% in the second quarter this year when compared to the previous quarter, which was the lowest quarterly growth in over a year, the statistics office said on Friday. Year-on-year GDP growth slowed to 2.5% from 3.3% in the first quarter.

The bank said prospects regarding demand for Slovenian products from abroad are worsening also for the year 2020.

Slovenia exports about 80% of its production, mostly to other EU states. Main exports include cars, car parts, pharmaceutical products and household appliances.

“As there are yet no signs of improved conditions in industry in the international environment while domestic business sentiment has somewhat worsened, we expect continuous lower economic growth also throughout the rest of this year,” the bank said.

Business sentiment fell to a three-year low in June but has since slightly recovered.

The bank said high inflation growth is supported by high growth of service prices “which has accelerated this year also due to high growth of wages in the public sector”.

The statistics office said last month average gross public sector wage increased by 5.3% year-on-year in June, compared to a rise of 3.2% in the private sector, after the government agreed to hefty public sector wage hikes from January 2019 to prevent labour strikes. (Reporting By Marja Novak, editing by Pritha Sarkar)

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