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2020/09/11 / Erste Group Research

2021 recovery pace under high level of uncertainty

GDP plunged into the double-digit area in 2Q20, reflecting the full impact of the lockdown measures which were introduced in April and lasted up to mid-May, resulting in 13% y/y contraction. Going forward, we expect to see the economy gradually bouncing back from 2H20 onward, supported by the expected stabilization of domestic demand and gradual recovery of EU growth dynamics. Bottom line: we see FY20 GDP decline of 6.9% y/y, followed by a rebound in 2021. However, with the recovery taking place under a high degree of uncertainty, this remains dependent on future epidemiological developments.

While low energy prices and dented demand-side pressures pushed CPI into negative territory, the deflationary tone gradually eased up in recent months. The Slovenian government presented a revised budget deficit figure for 2020, with the gap now estimated at around 9.3% of GDP, as a result of the coronavirus pandemic. Consequently, public debt is seen as reverting to the upside trajectory by moving above the 80% of GDP mark. The benchmark 10Y bond yield further declined to below 0.1% during September.

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General information

AuthorErste Group Research
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focusSlovenia
Currency in focusEuro
Sector in focus-


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