Business News

GZS Expects GDP Growth to Stand at Around 2% in 2011

Ljubljana, 06 October (STA) - The Chamber of Commerce and Industry (GZS) projects that Slovenia's economy will expand by 2% next year, which is half a percentage point lower from the rate forecast by the Institute of Macroeconomic Analysis and Development (IMAD). The GZS also forecast 2% inflation and 7% unemployment for 2011.

GZS executive director for legislation and policies Alenka Avbersek told the press on Wednesday that the chamber is not as optimistic as the government think-tank, although the government has drafted the 2011 and 2012 budgets based on IMAD's estimate from mid-September.

According to her, the final figure will depend on the implementation of the planned investments in the private and public sectors. The chamber has already criticised the budgets as too welfare-oriented.

The GZS projects a 1.9% inflation rate in 2010 and slightly more than a 2% inflation rate in 2011. Avbersek warned about the potential and existing hikes in the prices of utility services, excise duties and similar measures which have a direct impact on macroeconomic indicators.

The chamber is also less optimistic than IMAD about the jobless rate. It expects the unemployment rate to rise to 7% as a consequence of liquidity and solvency problems in companies, according to Avbersek.

She added however that companies' operations are improving, yet they are still below the pre-crisis levels. "These are jobs which were largely covered by the expiring intervention laws for the preservation of jobs. These have been good measures, saving between 20,000 and 30,000 jobs," she added.

According to Avbersek, the biggest threat to jobs in Slovenia are relocations of the production of low-cost products to the Balkans.

The GZS also noted that the envisaged reduction of the budget deficit in 2011 and 2012 could be carried out with investment. "Although a EUR 1bn in investment has been planned, this is not even close to the necessary amount," Avbersek said.

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