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EU Forecasts 5.3% Deficit, 2% GDP Contraction for Slovenia in 2013

Brussels, 03 May (STA) - The European Commission downgraded on Friday its economic forecast for Slovenia for 2013, saying that the budget deficit was to hit 5.3% of GDP and not 5.1% as envisaged in the winter forecast. Slovenia's economy is expected to contract by 2% this year, which is in line with the winter projection.

The figures for next year were also significantly downgraded. While in the winter forecast Slovenia's economy was projected to grow by 0.7% in 2014 and the deficit to narrow to 4.7%, now the Commission anticipates a 4.9% deficit and a 0.1% drop in GDP in 2014.

Slovenia is the only EU country apart from Cyprus whose economy is not expected to return to growth in 2014. Cypriot GDP is expected to drop by 3.9% next year.

The country's deficit also remains an issue, as it should be brought to below 3% of GDP this year. If the country fails to meet this goal, it will face sanctions. The Commission assessed back in February that this was "realistically unattainable".

It has been indicated that some countries may get an extension of the deadline to bring their deficit under control, but an official decision is expected to be made at the end of May.

Slovenia's public debt also continues to rise. While it stood at 22% of GDP in 2008, the Commission expects it to top 61% this year and reach 66.5% next year, which is above the limit set by the EU but still much better than the EU and eurozone averages.

Unemployment is below average but growing, as it is projected to top 10% this year and 10.3% in 2014.

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