STA, 3 December 2019 - The central bank has warned that there are "substantial downside risks" in budgetary plans for 2020 and 2021 that the National Assembly confirmed in a revote this week.
The risks "stem from a possible acceleration of the slowing of economic growth," Banka Slovenije said in a report on macroeconomic trends released on Tuesday. "There are few signs of faster growth towards the end of the year."
For 2020 budget expenditure is capped at EUR 10.36 billion and revenue at EUR 10.77 billion, making for a surplus of EUR 415 million. In 2021 expenditure will rise to EUR 10.45 billion and revenue is projected to climb to EUR 11.1 billion, with the surplus swelling to EUR 657 million.
While the budgets were slightly corrected after the government's forecaster, IMAD, revised its growth projections downward, they still project the highest outlays the government has ever had at its disposal, as revenue in recent years has been buoyed by brisk economic activity and employment growth.
But much like the Fiscal Council, the fiscal policy watchdog, the central bank warns that export growth is slowing due to uncertainty over global trade, while construction, another engine of growth, is weakening.
At the same time, business and consumer sentiment are deteriorating, and even though employment growth remains robust, underpinning strong domestic spending, figures from the construction sector indicate employment growth may be stalling.