Macroeconomic Forecast Slovenia

Latest national accounts data show real GDP growth slowed sharply in the final quarter of 2007, to 4.7% y-o-y. Using this figure, preliminary estimates of full year growth stand at 6.1%, the fastest rate since the declaration of independence. According to the statistics office, exports continued to propel the economy, in line with our view that the external sector will fill the void left by declining fixed capital investment and consumption going forward. Our forecasts imply a gradual deceleration in growth going forward, with a target of 5.0% and 4.3% in 2008 and 2009 respectively. However, as the global outlook worsens, we acknowledge significant downside risks to our projections.

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