March 23, 2020 / 8:23 AM / 16 days ago

Slovenia cenbank governor sees huge coronavirus impact on economy

LJUBLJANA (Reuters) - The effects of the coronavirus epidemic on the Slovenian economy will be huge, Bank of Slovenia Governor Bostjan Vasle said in an interview with national news agency STA published on Monday.

He said, however, that the impact of the virus can only be properly assessed when health conditions stabilise.

Slovenia, which borders Italy, Austria, Hungary and Croatia, has confirmed 414 coronavirus cases and two people have died.

Vasle, who also sits on the ECB governing council, said Slovenian banks have sufficient capital and liquidity which increases their resistance to the current situation.

“In spite of a good starting point the crisis will reflect in banks, as well,” he said, adding the influence on the banks will depend on the longevity of exceptional circumstances and the effectiveness of decrees passed.

He said the Bank of Slovenia does not expect any problems regarding cash supply in the country.

Slovenia has passed legislation which will delay bank loan repayments to businesses and individuals affected by the epidemic by 12 months.

At least 1 billion euros ($1.07 billion) will be made available to companies in trouble, mainly through loans by Slovenia’s export and development bank SID Banka. The government is due to pass further measures to help the economy in the coming days.

The government’s macroeconomic institute UMAR expects GDP growth of 1.5% this year, providing conditions stabilise in the second half of the year. Slovenia’s export-oriented economy expanded by 2.4% last year.

Reporting by Marja Novak, editing by Ed Osmond

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