We estimate government debt rose to around -- of GDP in ----. Given that this is exceptionally high for a developing country, the government has implemented fiscal austerity to rein in the budget deficit and ultimately lower national debt levels. ...Gross Fixed Capital Formation: The still-weak state of the banking sector combined with legacy bad debt issues in non- financial enterprise is a toxic combination for fixed investment in Slovenia. High enterprise debt levels reduce aggregate demand for credit as companies instead seek to pay down existing li- abilities, while the high level of non-performing loans on bank balance sheets has kept credit conditions tight, choking off the supply of credit to the real economy. As a result, gross fixed capital formation has been � and will remain � weak until the underlying structural issues facing the economy have gone some way towards being resolved. ...Similarly, weak fixed investment prospects suggest lim- ited demand for capital and intermediate goods, although rising external demand may temper this trend somewhat.
...Slovenian real GDP growth should maintain its momentum in ----. The recovery will remain heavily dependent on external demand as the primary driver of growth but a gradual recovery in household consump- tion may develop too. ...The recovery will remain heavily dependent on external demand as the primary driver of growth but a gradual recovery in household consump- tion may develop too. Quarterly Update: Despite the challenging start to the year, the outlook for Slovenia in ---- is mildly improved, and we see scope for a regional cyclical upswing to lift real GDP growth higher than last year on the back of stronger international trade volumes. Eurozone growth is set to remain steady in ----, and the outlook for Germany and Italy, two of Slovenia s largest trading partners, has improved. ...Export growth has been strong, with exports of goods and services growing by -.- y-o-y in Q--- and -.- y-o-y in Q---, leading to contributions of -.- percentage points (pp) and -.-pp respectively.
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