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March 16, 2009

Križanič Expects Upturn in a Few Months

Economy Minister Franc KrižaničBrussels, 9 March - Finance Minister France Križanič forecasted on Monday that Slovenia would officially slip into recession this quarter, while he expects the economy to turn up again in a few months.

Commenting on the news of negative growth in Slovenia in the last quarter of 2008, Križanič said it was obvious that the second wave of the crisis had hit Slovenia.

The minister, who is in Brussels for the meeting of the Euro-group, pinpointed shrinking exports, investments and consumption as the main reasons for the 0.8% fall in Slovenia's GDP.

He finds it interesting that consumption fell despite growing salaries, resulting in a further contraction of the demand and real GDP.

This means that people started to worry, Križanič said, calling for more optimism, so as to increase consumption, and prevent GDP from falling.

Things will change when the circumstances change and fiscal stimulations start functioning. "In principle this takes a few months," the minister noted.

He added that the supplementary budget for 2009 that the government adopted at the end of February included the majority of measures aimed at stimulating growth. "The supplementary budget is drafted as a supplementary budget for the economic Uturn."

He believes that the measures will stimulate economic growth, which should stand at at least 0.6%, which will suffice for normally funding the budget and public expenditure.

Križanič added that Slovenia had some problems with building permits and preparing of investments in the railway infrastructure.

If these were ready, it would be much easier for Slovenia to respond. In Križanič's opinion, the legislation should be amended so as to speed up the preparation of some exceptional projects.

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