Slovenia's exports surge in September, economy rebounding

Krka dd Novo Mesto

07/11/2014 12:10

* Slovenia rebounding after 2 years of recession 
    * Sept exports up 14.2 pct y/y 
    * Jan-Sept exports up 6.1 pct 
 
    By Marja Novak 
    LJUBLJANA, Nov 7 (Reuters) - Slovenia's exports surged 14 
percent in September, the fastest growth in three years, in a 
further sign the euro zone member is rebounding after narrowly 
avoiding an international bailout last year.  
    The 14.2 percent year-on-year rise in September shipments 
meant exports rose 6.1 percent in the first nine months of this 
year, the statistics office said on Friday. Imports rose 2.1 
percent in the nine-month period. 
    "The export figures are good and could lead to a 
surprisingly high GDP growth in Slovenia this year," said Primoz 
Cencelj, a fixed income portfolio manager at investment firm KD 
Skladi. 
    Exports, predominantly cars and car parts, pharmaceutical 
products and household appliances, are well ahead of the 
Slovenia macroeconomic institute's forecast for a 3.7 percent 
rise this year. 
    Investment is also rising, while unemployment is gradually 
falling. 
    However, Cencelj said economic growth was likely to slow 
next year if Prime Minister Miro Cerar's government enforces 
planned public sector savings, which would curb domestic 
spending. 
    Cerar's centre-left government, which took office in 
September, plans to cut the public sector wage bill by 3 percent 
in 2015, in an effort to reduce the budget deficit to below 3 
percent of gross domestic product as demanded by European Union 
rules. This year's shortfall is expected at around 4.3 percent 
of GDP.  ID:nL6N0SH57W   
    The European Commission said on Tuesday that after two 
straight years of recession Slovenia's economy should grow by 
2.4 percent this year, above the Slovenia's official forecast of 
2 percent growth. 
    The Commission forecast growth next year of 1.7 percent, a 
touch higher than the government's projection. 
    Latest data shows the economy grew 2.9 percent in the second 
quarter year-on-year and by 1 percent seasonally adjusted from 
the previous three months. 
    Analysts said exports to European Union countries, which 
account for 77 percent of Slovenia's exports, are expected to 
continue rising, while exports outside the EU, particularly to 
Russia and Ukraine, may fall due to the Ukraine crisis, which 
has slowed the two economies and led to economic sanctions on 
Russia. 
    Exports to the two countries have already decreased by some 
8 percent this year. 
    On Thursday Slovenia's largest listed company, generic drugs 
producer Krka  KRKG.LJ  KRK.WA , trimmed its sales forecast for 
this year, citing weaker currencies in Russia and Ukraine and 
falling prices of drugs.  ID:nL6N0SW41T  
    Last year the Slovenian government had to pour more than 3 
billion euros of its own funds into local banks, which are 
mainly state-owned, to prevent them from collapsing under the 
weight of bad loans and enable the country to avoid a bailout. 
    Local banks' bad loans still amount to almost 6 billion 
euros, or 14.8 percent of all loans, according to Bank of 
Slovenia figures. 
 
 (Editing by Zoran Radosavljevic and Susan Fenton) 
 ((Marja.Novak@thomsonreuters.com; +386-8-205-6369; Reuters 
Messaging: marja.novak.thomsonreuters.com@reuters.net)) 
 
Keywords: SLOVENIA EXPORTS/