Page 49 - bne magazine February 2022_20220208

bne February 2022 OUTLOOK 2022 I 49
The central bank said that the growth is expected to be slightly slower in the final quarter of 2021, particularly
in light of the potential expansion of containment measures to prevent the renewed spread of the pandemic. Furthermore, the risks associated with the poor epidemiological picture in Europe, the spread of the new coronavirus variant, bottlenecks in supply chains, and high energy prices and input commodity prices are all growing.
External environment: The country’s current account surplus is projected at 6.4% of GDP in 2021 and 6.3% of GDP in 2022 following a surplus of 7.4% of GDP in 2020, according to the IMF.
Slovenia posted a current account surplus of €1.56bn in the first nine months of 2021, which is down by 37.6% from the same period in the previous year, according to central bank data. In 2020, Slovenia posted a current account surplus of €3.3bn, which is up by 20.2% from 2019.
In the third quarter of 2021, net exports had a negative contribution to the GDP growth of 5%, on account of the
“Slovenia’s retail sales soared by an annual 34.3% in October, accelerating significantly from a 17.1% y/y growth in the previous month”
stronger increase in import compared to exports. With a high level of investment, including in inventories, import growth was significantly above export growth.
According to Erste Group, Slovenia’s current account surplus is seen at 4.5% of GDP in 2022 from 4.8% of GDP in 2021.
Foreign direct investment (FDI) is expected at 2.4% of GDP both in 2021 and 2022, according to Erste.
Inflation and monetary policy: Inflation has been rising, which the central bank attributed to several one-off factors. It reached 4.9% in December, of which higher prices of petroleum products contributed 1.3 pp. The recent rise in energy prices is attributable to a low- base effect, and high prices of oil and natural gas
on international markets, while prices of emissions allowances are also rising.
The expectation is that inflation will persist at higher levels over the coming months, until the situation eases in global supply chains and on the energy markets.
Slovenia’s harmonised index of consumer prices inflation is seen at 1.7% in 2021 after the country posted an average deflation of 0.3% in 2020, the European Commission said. Inflation is expected to further speed up to 2.1% in 2022 and to slow down to 1.7% in 2023.
In terms of average annual inflation, the IMF said that Slovenia’s consumer prices are seen rising by 1.4% on average in 2021 and to speed up to 1.8% in 2022, compared with a slim deflation of 0.1% in 2020.
Industrial production: The situation in industry remained favourable, although firms are reporting high capacity utilisation and shortages of intermediate goods, which
is already curtailing growth in exports, according to the central bank. Firms are also seeing growth curtailed by higher commodity prices and energy prices, and a shortage of skilled labour. Quarterly growth in value-added in industry thus slowed to 0.5% in the third quarter of 2021. Other sectors saw current growth in activity either maintain the same level as in the second quarter, or pick up the pace.
Year on year, industrial production increased by 6.2% in October, after rising by 7.8% y/y in September.
In October 2021, the total value of stocks in industrial production was 1% higher than in September 2021. It was 9.6% higher than in October 2020 and 10.6% higher than in October 2019.
Real economy
Retail: The growth of retail sales is expected to slow down to 7.3% in 2022, from estimated 14.8% growth in 2021, according to Erste.
Slovenia’s retail sales soared by an annual 34.3% in October, accelerating significantly from a 17.1% y/y growth in the previous month, according to the statistics office.
Retail sales also grew compared to pre-pandemic October 2019, by 20.1%. The annual growth was primarily a consequence of the increase in retail trade with automotive fuel (by 97.2%), but growth was also significant in retail trade of non-food products (by 13.1%) and food products (by 7.6%).
Banks: The net profit of Slovenian commercial banks plunged by an annual 38.3% to €324.4mn in the first nine months of 2021, the Bank of Slovenia said. This was a result of lower non-interest income.
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