LJUBLJANA, Nov 25 (Reuters) - Risks to Slovenia’s exports and GDP growth have increased from a month ago, the Bank of Slovenia said on Wednesday, citing rising tensions in the Middle East, although it did not change its 2015 and 2016 growth forecasts.
The central bank said in a statement that instability in the international environment has increased and that World Trade Organization estimates showed weak international trade dynamics.
It said rising geopolitical tensions in the Middle East “have negative consequences for Europe” although they have so far “not been reflected in the economic growth of (Slovenia’s) main trading partners
Slovenia’s third quarter economic growth is expected to have been above the euro zone average, mainly because of export growth, the central bank said. The statistics office will release GDP figures for the third quarter on Monday.
Gross domestic product rose by 2.6 percent year-on-year in the April-June quarter.
The bank continues to expect GDP growth of 2.6 percent this year and 1.9 percent in 2016, it said, with exports seen growing around 5 percent in each of the two years.
Rising exports helped Slovenia’s economy return to growth last year after it narrowly avoided needing an international bailout in 2013 as the country’s largely state-owned banks teetered under the weight of bad loans.
The central bank said public finances continue to improve and that the government should reach its goal this year of reducing the budget deficit to below the European Union’s 3 percent of GDP ceiling from 4.9 percent last year.
But “risks in the fiscal area remain significant, mainly on account of ... transactions of the Bank Asset Management Company (BAMC) and the financial burden of the migrant crisis,” it said.
BAMC, Slovenia’s “bad bank”, has taken over many of the banks’ bad loans and is restructuring them.
Slovenia is also dealing with a sudden influx of migrants which Interior Minister Vesna Gyorkos Znidar has said is costing the country some 770,000 euros per day.
More than 265,000 migrants have entered Slovenia heading towards Austria and Germany since Hungary closed its border with Croatia in mid-October and pushed the migration route westwards.
Slovenia has received an extra 10 million euros from the EU help cover those costs. (Reporting by Marja Novak; Editing by Catherine Evans)