Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Slovenia’s Economy Is in Recession as Consumption Slumps

Nov. 29 (Bloomberg) -- Slovenia’s economy slid into its second recession in three years in the third quarter as the euro-area country edges toward an international bailout because of a banking crisis, a survey of economists showed.

Gross domestic product contracted 0.3 percent from the previous three months, compared with a 1 percent decline in the second quarter, according to the median estimate of seven economists in a Bloomberg survey. GDP dropped 2.3 percent from a year earlier, the survey showed. The statistics office will publish GDP data at 10:30 a.m. in Ljubljana tomorrow.

Slovenia and other peripheral countries of the 17-member currency bloc are struggling with an economic slump as austerity measures depress demand. GDP is set to shrink 2.4 percent this year, the most in the euro region after Greece and Portugal, according to a Nov. 27 report by the the Paris-based Organization of Economic Cooperation and Development.

“Private consumption will continue to contract and ongoing fiscal consolidation will deliver a further blow to growth dynamics,” Abbas Ameli Renani, a London-based emerging-markets economist at Royal Bank of Scotland Group Plc, wrote in an e-mail.

The yield on Slovenia’s $2.25 billion 10-year bond sold last month surged to a record high on Nov. 13 as news of a possible referendum on the bank plan emerged. It has dropped since and was at 5.535 percent at 5:23 p.m. in Ljubljana, according to mid-pricing data compiled by Bloomberg.

Banking Crisis

Slovenia’s economic plight is being exacerbated by the ailing banking industry which has limited access to funding from outside the country except for loans from the European Central Bank.

Legislation to create a so called bad bank, which has been passed by lawmakers, is being delayed by a referendum motion from a trade union, which is collecting the required signatures for a people’s vote on the measure.

The government has asked the Constitutional Court to prevent the referendum on the bank recapitalization plan. Nova Ljubljanska Banka d.d., Nova Kreditna Banka Maribor d.d. and Abanka Vipa, the three biggest banks by assets, are seeking fresh funding to bolster their capital after it was eroded by a surge in bad loans.

‘Negative Impact’

“Delays to the bad bank law are already having a negative impact,” Abbas Aneli Renani said.

The bank recapitalization plan foresees cleaning up banks’ balance sheets by removing bad loans to a special government agency in exchange for as much as 4 billion euros ($5.2 billion) of government-backed bonds.

Slovenian banks are the main concern of investors as the euro region nation may be forced to seek an international bailout to prop up the ailing industry. The former Yugoslav republic has been working on a recapitalization plan amid a surge in bad loans and the need for fresh capital.

While exports have been the only positive contribution to growth, RBS’s Abbas Aneli Renani said that as “domestic demand in Germany and across the euro region wanes, Slovenian export growth will come under intense pressure.”

Gorenje d.d., Slovenia’s biggest exporter, reported a loss of 6.4 million euros in the first nine months of the year, its first since 2009 as demand for home appliances in Europe waned and the company had increased cost as it shifted operations from Finland to the Czech Republic.

To contact the reporter on this story: Boris Cerni in Ljubljana at

To contact the editor responsible for this story: James M. Gomez at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.