July 17, 2019 / 9:40 AM / a month ago

UPDATE 1-Slovenian growth solid, but conditions in industry less favourable - cbank

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By Marja Novak

LJUBLJANA, July 17 (Reuters) - Slovenian economic growth is “very solid”, even though it is slowing, but conditions in the industrial sector are less favourable, the Bank of Slovenia said on Wednesday.

“The Slovenian export sector remains fairly robust for now,” in the face of worries about low economic growth in the euro zone and a fall in production in some parts of the manufacturing sector, the bank added in its monthly report.

“Monthly indicators point to further slowdown of (Slovenian) economic growth in the second quarter...which is mainly seen as due to weaker growth of industrial production,” the bank said.

Slovenia’s economy expanded by 3.2% year-on-year in the first quarter while the statistics office will publish data for the second quarter on August 30.

With industrial production rising strongly in companies that produce pharmaceuticals, computers, electronic and optical products, the growth is slower in metal and plastic industry which produces car parts, the Bank of Slovenia said.

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

It added an average gross wage increased by 4% year-on-year in April which exceeded the growth of productivity. In spite of that Slovenia’s competitiveness in the euro zone has not changed significantly due to similar moves in the rest of the zone.

The bank also said recent privatisations of Slovenia’s first and third largest banks, Nova Ljubljanska Banka (NLB) and Abanka, should help toward reducing public debt as the government received a total of 553.5 million euros ($620.58 million) from the sale of the whole of Abanka and 10% of NLB in June.

“Reducing public debt remains the key task of the fiscal policy as the state can in this way prepare for possible negative economic shocks in the future,” the central bank said.

The government plans to reduce public debt to below 60% of GDP by the end of 2021 from 70% in 2018. ($1 = 0.8919 euros) (Reporting By Marja Novak Editing by Andrew Heavens and Angus MacSwan)

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