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2022/12/01 / Erste Group Research

Bleaker external prospects and overall high level of uncertainty to weigh on 2023 outlook

Following robust 9% y/y increase in 1H22, growth momentum slowed down going into second half of the year, with GDP increasing 3.4% y/y. Detailed structure revealed strongly deflated support on the private consumption side, while net exports had a positive contribution amid strong services exports. With less encouraging entry into 2H22, the outlook for the remainder of the year should be in the similar tone. Thus, we keep our current FY22 forecast at 5.4% y/y, while 2023 growth is expected around 1% mark, with weakened external demand, still present inflation pressures and overall high level of uncertainty dampening domestic demand prospects.

While inflation trajectory remained overall under strong upside pressures, CPI eased to single-digit area as a result of the government's measures to mitigate the impact of surging energy prices. Inflation is expected to remain around 10% mark by the year-end, followed by gradual easing towards the lower levels in 2023. On the fiscal side, 2023 budget deficit target is suggesting more accommodative stance, with the expected widening of the gap reflecting government's efforts to tackle the energy crisis. Following strong upside moves, yields showed downward trajectory during November, with the 10Y curve currently moving towards 3% level.

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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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