EBRD has upgraded its GDP growth forecast for Slovenia for 2014 to 0.7% from zero growth projected in May. Next year Slovenia's economy is projected to expand by a further 1%. The EBRD's expectations are still pessimistic given the current economic trends.
In the report published on Thursday, the bank said that the upgrade was a result of better-than-expected economic growth in the first and second quarters, and solid exports figures.
However, the EBRD warns that restructuring of companies, which is of key importance for long-term growth, is slower than expected, expressing hope that this process will be facilitated by the new government.
This is a second upgrade of GDP growth projection for this year, the first coming in May when the London-based institution forecast a zero growth after projecting a 2% contraction in January. The forecast for 2015 remained unchanged at 1% growth.
While the EBRD is optimistic, its projection is still reserved given the current economic trends. The country's GDP increased in the second quarter of 2014 by 2.9% in real terms compared to the same period last year.
EBRD president Suma Chakrabarti told the STA on the sidelines of the Bled Strategic Forum two weeks ago that he was happy that the situation in Slovenia improved and that the bank was wrong in forecasting zero growth for this year.
But Chakrabarti also noted that Slovenia must become more open to foreign investments, adding that the EBRD was ready to invest in the country in the coming years if the new government continues with reforms and economic policy of the outgoing cabinet.
Source: The Slovenia Times
Photo source: Business insider
Independent Balkan News Agency
