June 8, 2020 / 10:12 AM / a month ago

Slovenia central bank sees 2020 GDP down 6.5% due to coronavirus pandemic

LJUBLJANA (Reuters) - The Bank of Slovenia expects the county’s GDP to fall 6.5% in 2020 due to the coronavirus pandemic before rising by 4.9% in 2021, it said on Monday.

In December the bank forecast 2020 GDP growth of 2.5% but at the end of March it said GDP this year would fall between 6-16%, depending on the duration of the epidemic which reached Slovenia in March.

“The pandemic is the most important factor in this forecast ...We based the forecast on an assumption that the pandemic was curbed successfully and that measures needed in the future will not be as strict as so far,” Vice Governor Jozef Bradesko said.

He told a news conference the bank based its forecast on an expectation that a medical solution to the coronavirus will be found in 2021. The central bank sees 2022 GDP growth at 3.6%.

Exports are expected to fall by 12.6% this year and rise by 7.5% in 2021, while household spending is expected to increase next year by 4.4% versus a fall of 6.6% this year.

The average annual inflation rate this year is seen at zero mainly due to lower global energy prices, down from 1.7% in 2019. Inflation should rise to 1.3% next year, the bank said.

Slovenia exports about 80% of its production, mostly to other EU states. Its main exports include cars, car parts, pharmaceuticals and household appliances. Its economy expanded by 2.4% last year.

Slovenia introduced a general coronavirus lockdown in mid-March and started to gradually lift it from April 20.

In May it became the first European country to declare an end to its COVID-19 epidemic. Slovenia has reported 1,485 coronavirus cases and 109 deaths.

Reporting by Marja Novak; Editing by Ivana Sekularac and Ed Osmond

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