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Slovenia Business Week no. 39: IMF Forecasts Modest Economic Slowdown in Slovenia

The International Monetary Fund (IMF) expects economic growth in Slovenia to slow down modestly in 2005 as export growth and domestic demand weaken

The International Monetary Fund (IMF) expects economic growth in Slovenia to slow down modestly in 2005 as export growth and domestic demand weaken. "The economy appears well poised to adopt the euro, although challenges remain, particularly to consolidate the progress that has been made in reducing inflation," according to the IMF's World Economic Outlook report.

In its latest report, which was published on Wednesday, 21 September, the IMF places Slovenia among the countries dubbed "emerging Europe," where it projects growth will be hurt by dwindling demand in Western Europe and the spiralling oil prices.

The region, where GDP growth was 6.6% last year, is set to grow at a rate of 4.3% this year and 4.6% in 2006. The IMF projects Slovenia's growth, which topped 4.6% last year, to amount to 3.9% this year, accelerating to 4% in 2006.

Slovenia is thus expected to exceed average growth in Central Europe (3.5%); only Slovakia with 5% is to overtake it in the region, but, more broadly, Baltic countries will top the list with a projected rate of 7.5% this year and 7.1% in 2006.

Moreover, IMF reports that Slovenia had the lowest current account deficit among the emerging Europe economies in 2004, 0.9% of GDP. The deficit is projected to increase to 1.6% of GDP this year, but it is expected to fall back to 0.8% next year.

The figures for inflation are favourable as well: 3.6% last year, 2.6% this year and 2.7% in 2006. This is on par with the average for central Europe, which was at 4.2% last year and projected at 2.5% for this year.

Source: Slovene Press Agency STA

Author: STA