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2021/03/10 / Erste Group Research

2020 GDP down by 5.5%, recovery outlook dependent upon epidemiologic developments

Following mild 2.4% contraction in 3Q, GDP downturn deepened in the last quarter of the 2020 amid negative impact of the second wave of pandemic. Headline figure posted 4.5% y/y decline, with private consumption having most pronounced negative impact, while net exports recorded a positive contribution amid stronger imports vs. the exports decline. Going forward, higher vaccination rate and further relaxing of the restrictions should result in a stronger growth from 2Q21, with rebound of the both domestic and external demand being supported by recovery measures on local and EU levels, suggesting 2021 GDP growth around 4.5% mark.

Most recent CPI figures revealed deflationary pressures remained alive going into 1Q21, with such developments mainly reflecting high base effect from last year. As a result of pandemic, 2020-2021 budget gaps are estimated at 9.3% and 5.6% of GDP (respectively). Consequently, public debt is seen reverting to the upside trajectory by moving above the 80% of GDP mark. After dipping into negative territory at the beginning of the year, yields started to move upwards at the end of February, aligning with the global movements.

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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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