At the same time, the central bank notes that inflation remains favourable, as it stood at an annual rate of 1.6% in October
The rapid pace of Slovenia's economic growth in the first half of the year started to slow down in the third quarter, the Board of Governors of the Bank of Slovenia concluded on Wednesday, 15 November based on the available data on industry and trade.
At the same time, the central bank notes that inflation remains favourable, as it stood at an annual rate of 1.6% in October, mostly as a result of cheaper fuel. This suggests that inflation will stabilise as forecast.
The central bank's assessment is on par with the projections of the Institute for Macroeconomic Analysis and Development (IMAD), the government think-tank.
IMAD said that the pace of growth was still brisk but heading for a slowdown early next year due to lower demand from Germany, Slovenia's main trading partner.
IMAD projects that the economy is on track to expand by 4.7% this year and 4.3% in 2007.
This is precisely the assessment that the Italian banking group UniCredito made, based on projected strong domestic and external demand.
The Board of Governors also assessed the stability of the bank system, concluding that banks are at risk from higher interest rates and lower margins due to more expensive loans from foreign banks.
However, the central bank does not believe any of the potential shocks could jeopardise the solvency of banks.
Source: Slovenian Press Agency STA
Author: STA, Slovenian National Press Agency