Slovenia’s Economic Contraction Continues on Weak ConsumptionGordana Filipovic
Slovenia’s economic contraction continued in the last quarter of 2012 on slumping consumption and shrinking exports to Europe.
Gross domestic product fell 3 percent from a year earlier after a 3.3 percent drop in the July-September period, the statistics office in Ljubljana said on its website today. The figure was better than the median forecast of seven economists in a Bloomberg survey for a decrease of 3.5 percent.
“The economy will be dragged lower by most components of GDP, including government and private consumption, as well as investment,” Abbas Ameli-Renani, an economist at Royal Bank of Scotland Group Plc in London, said by e-mail yesterday. The only boost will come from goods shipped abroad, though “a contraction in exports for the first time since 2009 shouldn’t come as a surprise given the absence of a bounce-back in Slovenia’s main trading partners.”
The Alpine nation’s lawmakers yesterday elected Alenka Bratusek as prime minister, replacing Janez Jansa, whose government crumbled amid a corruption scandal and demonstrations against austerity moves such as spending cuts. Slovenia is trying to avoid becoming the sixth euro member to need a bailout as its banking industry struggles because of bad loans amid a recession sparked by the debt crisis.
The economy will continue to contract in 2013, probably by “1.7 percent” for many reasons including “political problems,” Darja Mocnik of the the Slovenian Chamber of Commerce, said in e-mailed comments. “Political bickering has great negative consequences on the economy” which are difficult to assess.
The economy will shrink the most in the European Union this year after Greece and Cyprus on weakening investment and faltering domestic consumption, the European Commission said in a Feb. 22 report. GDP will decline 2 percent this year after an estimated 2 percent contraction last year, the EU’s executive arm said.