IMAD Forecast: Slovenia's Economic Growth at over 4% in 2004
"Slovenia's economic growth this year will probably somewhat exceed 4 percent, yet it will be below the 4.5 percent reached in the first three quarters of the year," the director of the national macroeconomic institute told the press on Monday.
There is no doubt that Slovenia's economy will grow at a minimum of 4 percent, stressed Janez Sustersic of the Institute of Macroeconomic Analysis and Development (IMAD).
The forecast is based on the economic growth figure from the first three quarters, when the economy grew at 4.5 percent and exceeded the anticipated figure greatly. The January-to-September forecast was released last week.
If economic growth in the last quarter is weaker than in the second or third, the IMAD is expected to make a somewhat lower forecast for 2005 than in 2004. In its 2004 autumn forecast, the institute anticipated the country's economic growth rate for 2005 at 3.8 percent.
The inflation forecast for 2004 remains realistic, said Sustersic. He believes Slovenia will achieve the 3.6 percent inflation rate if December prices rise by no more than 0.1 percent. Given that oil prices are falling, Sustersic is convinced this is feasible. Inflation is falling at the expected pace, getting ever closer to meeting the Maastricht criteria, he said.
Fears that consumer spending might increase inflation have not come true. In the first nine months of the year, the consumer speanding stood at 3.6 percent, lagging behind the economic growth considerably, according to the IMAD.
The first three quarters of the year were also marked by a growth in exports, which amounted to over 10 percent. The exports increased to all markets, including the EU market, to where they were rather low in recent years.
The exports were particularly high in the second quarter of the year, that is the period prior to Slovenia's EU entry, while they came down again in the third quarter.
Investments into fixed assets rose by 6.9 percent in the first nine months, which was 1 percentage point below the IMAD forecasts. The figure is though encouraging since it includes a high volume of corporate investments.
While economic growth is increasing public finance revenues, falling inflation is lowering them, Sustersic pointed out and cautioned against the high economic growth being an excuse for increasing public spending.
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