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Govt forecaster slashes GDP growth projection to 1.5%

Ljubljana, 12 March - IMAD, the government's macroeconomic forecaster, has halved its GDP growth forecast for the year to 1.5% from 3% due to the uncertainty caused by the coronavirus pandemic. The projection is made under the assumption that the situation will calm down in the second half of the year.

Ljubljana
IMAD, the government macroeconomic think-tank, upgrades economic growth forecast.
Photo: Tamino Petelinšek/STA
File photo.

"Economic growth will be significantly lower than projected in autumn. The forecast is very dependent on the speed with which the coronavirus will be contained and measures that governments take," IMAD said on Thursday.

Under the current assumptions, export and import growth will be halved, with domestic consumption and investments below last year's level as well.

The forecast for next year was cut to 2.2% from 2.7%.

IMAD director Maja Bednaš stressed the high uncertainty underlying the forecast, as the dynamics will depend on the speed with which coronavirus spreads.

Bednaš said the forecast would be revised within weeks if necessary to provide the treasury with the latest estimate necessary for budget planning.

Government measures should focus on healthcare, job protection and liquidity assistance to companies in trouble. Bednaš also thinks EU countries should consider loosening fiscal rules that restrain spending.

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© STA, 2020