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Slovenia Country Risk Report Q3 2019

Slovenia Country Risk Report Q3 2019

Slovenia's five-party minority coalition government has overcome key policy challenges and maintains a healthy level of public support. A new cooperation agreement with the leftist alliance should support policymaking in the near term, and we have raised our Short-Term Political Risk Index score from 69.8 to 70.6.

We expect economic activity to moderate further in 2019 and 2020 amid rising headwinds to export growth. However, higher wages and state spending will support domestic demand in the coming years, reducing the risks of a sharp downturn.

Though the merchandise trade surplus will shrink over the forecast period, we expect robust growth in tourism to maintain a sizable current account surplus.

The government is likely to adopt a more expansive fiscal stance than in previous years, though pressure from the EU and fiscally conservative coalition partners should prevent a major lapse in budgetary discipline.

Key Risks

The potential for disputes within the five-party coalition – or with the leftist alliance from which it requires support to reach a parliamentary majority – will remain an underlying threat to political stability.

A sharper than expected regional slowdown, particularly in key export markets such as Germany and Italy, would pose a downside threat to our growth forecasts.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
External Headwinds To Slow Growth
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: TOP 5 IMPORTS AND EXPORTS
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
Monetary Policy
Major Downside
TABLE: SCENARIOS TABLE
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: GOVERNMENT REVENUE/SPENDING SOURCES
Eurozone Growth
Q119 Eurozone GDP Data Support Our Above Consensus Growth Position
TABLE: REAL GDP, % CHG Y-O-Y
Currency Forecast
EUR: Modest Strength Ahead, But Downside Risks Loom Large
TABLE: EUROZONE CURRENCY FORECAST
Slovenia Country Risk Q3 2019THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report is solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.ContentsEurozone Household Debt
Eurozone Household Indebtedness Trend Posing Limited Threats
10-Year Forecast
The Slovenian Economy To 2028
Growth Rate To Cool And Slow Convergence
TABE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Improved Short-Term Outlook For Slovenia's Minority Coalition Government
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Slovenia To Remain Pro-EU
Operational Risk
TABLE: OPERATIONAL RISK
Business Crime
TABLE: BUSINESS RESPONSE TO WHITE COLLAR AND ORGANISED CRIME
Education
TABLE: SLOVENIA AND OECD AVERAGE – STUDENT PERFORMANCE SCORES (2015)
Global Macro Outlook
Resurfacing Of Trade Tensions Dampens Outlook
TABLE: GLOBAL MACROECONOMIC FORECASTS (2018-2023)
TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: SLOVENIA – MACROECONOMIC DATA AND FORECASTS

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