March 5, 2019 / 4:33 PM / 3 months ago

Slovenia cenbank sees worsening prospects for export sector

LJUBLJANA, March 5 (Reuters) - Prospects for the Slovenian export sector are worsening due to lower foreign demand amid economic slowdown in the euro zone, the Bank of Slovenia said on Tuesday.

Slovenia, which expects its economy to expand by up to 3.7 percent this year versus 4.5 percent in 2018, exports about 70 percent of its production, mainly to other EU states.

Main exports include cars, car parts, pharmaceuticals and household appliances.

“At the start of the year, manufacturing companies significantly reduced estimates of growth of demand in the short term,” it said in a report, adding the global economic slowdown was also reducing growth of investments in factory equipment and machines.

It added employment in Slovenia remains high after joblessness fell to 4.4 percent in the last quarter of 2018, the lowest level in 10 years.

“Wage growth did not weaken the cost effectiveness of the economy last year because it did not exceed productivity growth,” the bank added, saying productivity has to exceed wage growth in the future as well for the economy to remain competitive.

December gross monthly wages were 3.4 percent higher than a year before.

The bank added preliminary figures show Slovenia’s budget surplus amounted to 1.1 percent of GDP last year versus 0.1 percent in 2017. The government plans a surplus of 0.55 percent this year. (Reporting By Marja Novak; Editing by Andrew Cawthorne)

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