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OECD Downgrades Slovenia's Growth Forecast for 2011 to 2%

Paris, 18 November (STA) - The Organisation for Economic Cooperation and Development (OECD) has projected in its latest economic outlook for OECD member states 2% growth of Slovenia's economy in 2011, a drop of 0.4 percentage points from its May forecast.

The forecast, released on Thursday, projects that Slovenia's economy will expand by 1.1% this year, which is slightly more than 0.9% forecast by the Office for Macroeconomic Analysis and Development (IMAD), a Slovenian government think-tank.

OECD analysts are meanwhile more pessimistic about the growth in 2011 than IMAD, which has forecast 2.5% growth for next year.

The international organisation has projected 2.8% growth for Slovenia in 2012, while the government think-tank expects the Slovenian economy to expand by 3.1%.

According to the OECD, whose member Slovenia became in July, the recovery of the Slovenian economy has been facilitated by exports, and domestic spending is also expected to pick up in the coming two years.

Following this year's 0.6% growth, domestic spending is expected to increase by 2.4% in 2011 and by 2.8% in 2012. Exports are meanwhile projected to grow by 6.4% in the next year and by 6.6% in 2012.

The unemployment rate according to the Labour Force Survey is expected to stabilise only in 2011 at 7.6% and then drop to 7.4% in 2012.

The OECD is more pessimistic in this respect than IMAD, which expects a 7.1% unemployment rate in 2011 and a 6.9% rate in 2012.

However, the OECD and IMAD are closer in their projections of the budget deficit. The OECD expects the deficit to drop to 4.7% of GDP in 2011 (the same as IMAD), and to 3.9% of GDP in 2012 (0.1 percentage points more than IMAD).

According to the OECD, inflation will not be a problem in Slovenia in the coming two years, and will revolve around the medium-term goal of the European Central Bank, which is slightly under 2%.

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