May 5, 2020 / 8:16 PM / a month ago

UPDATE 1-Slovenia's GDP could fall more than 15% due to coronavirus -institute

(Updates with quote, details, background)

By Marja Novak

LJUBLJANA, May 5 (Reuters) - Slovenia’s GDP could fall this year by 15% or more if its coronavirus lockdown lasts longer than now estimated, the government macroeconomic institute UMAR said on Tuesday.

It said in a report that its current, basic scenario envisages a GDP fall of 8.1% this year and growth of 3.5% in 2021. Slovenia has so far reported 1,445 coronavirus infections and 98 deaths.

“The depth of the GDP fall depends upon the future speed with which the coronavirus will spread, the longevity of the epidemic and measures of economic policies at the level of the state and the EU,” the institute said.

It added the basic scenario is made on the assumption that the spread of the epidemic will slow down by the third quarter of the year which could lead to gradual economic recovery in the second half of the year.

UMAR expects exports to fall by 19.4% and investments by 18.5% this year. It sees exports rising by 10% in 2021. The jobless rate is seen rising to 9.1% this year versus 7.7% in 2019.

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

The country has since the middle of March closed all schools, bars, restaurants, hotels and cultural institutions, prohibited any socialising in public spaces and cancelled public transport. It had introduced obligatory quarantine for most people entering the country.

Many companies had to suspend production due to lack of parts, lower demand or with an aim to reduce the spread of the virus.

From Monday bars and restaurants are allowed to serve drinks and food outdoors while public transport is expected to resume on May 11. Small tourist facilities could open next week while hotels might be able to open in June.

Some pupils are due to return to schools on May 18 while most will continue with internet lessons until the end of the school year in late June. (Reporting by Marja Novak Editing by Mark Heinrich and Jonathan Oatis)

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