Slovenia’s economy will shrink more than previously forecast next year as the ailing banking industry and austerity measures prevent the euro member’s recovery, the government’s economic institute said.
Slovenia’s next government must cut public spending as the likelihood of the nation sliding into a recession because of the euro region’s debt crisis increases, according to the government’s forecasting institute.
Slovenia’s economic slump will deepen further this year and next on an extended recession in Europe and faltering demand in its home market amid a government austerity push, the state’s economic institute said.
Slovenia will have the only economy among the European Union’s eastern members to contract next year as the country teeters on the brink of needing an international bailout, the European Commission said.
Slovenia will probably have to review its 2010 budget because of the cost of its portion of the European Union’s bailout loan to Greece, according to the government’s chief economic forecaster Bostjan Vasle.