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Slovenia Business Week no. 32: CCIS Forecasts GDP Growth of 4.5% for This Year, 4.3% for 2007

Inflation is expected to stand at 2.5% this year and the next

The Chamber of Commerce and Industry (CCIS) forecasts that the Slovenian economy will grow at a rate of 4.5% this year and slow down somewhat to 4.3% in 2007. Inflation is expected to stand at 2.5% this year and the next, CCIS said on Wednesday, 11 October.

The figures are on par with the forecasts of the central bank, and somewhat more pessimistic than the projections of the Institute for Macroeconomic Analysis and Development (IMAD), which has put the GDP growth figures at 4.7% and 4.3% for the two years respectively.

The chamber's department for economic outlook and policies believes that the global economy will cool off somewhat, which will have a negative impact on Slovenia's exports and imports, Irena Rostan, the head of the department, told the press.

It is expected that growth in exports, the main engine of Slovenia's economic growth, will slow down from 9.2% this year to 8.2% in 2007, whereas imports are to grow by 8.5% this year and 7.2% next year, Rostan said.

According to projections, wages will grow by 2.1% this year and 2.2% in 2007. At the same time, the number of jobs is expected to increase by 0.8% and 0.7% respectively, which would put the ILO-compatible employment rate at 6.6% and 6.7% respectively.

Although the CCIS expects stable inflation, it points out that consumer prices could be affected if prices of raw materials increase. There are also risks associated with the adoption of the euro in 2007, although no particular impact on prices is expected.

The department for economic outlook estimates that the price of oil would hover around 60 US dollars per barrel in 2007, 9% lower than this year. Inputs overall are meanwhile projected to grow at an average of 8%.

A survey conducted by the CCIS in September has shown that the expectations of Slovenian businessmen are "moderately optimistic", especially regarding imports, sales and employment.

However, CCIS points out that the greater optimism might be due to the fact that a greater number of successful companies participated in the survey this year.

Source: Slovenian Press Agency STA

Author: STA, Slovenian National Press Agency