March 19 (SeeNews) - Erste Group said on Monday it will maintain its forecast for Slovenia’s economic growth in 2018 at 4.5%, despite the resignation of the country's prime minister.
Although the situation on Slovenia's political scene took an unexpected turn last week, as prime minister Miro Cerar submitted his resignation, it sees risks to its forecast remaining dominantly skewed to the upside, the banking group's analysts said in their latest CEE Insights publication.
"We do not expect the political uncertainty to have an adverse impact on the economy and markets, while the reform outlook was stalled by the approaching elections," Erste said.
Cerar resigned late on Wednesday, stating that 'the final straw' was the decision of the Supreme Court to annul the outcome of last year’s referendum, which backed the upgrade of the Divaca–Koper railway - his government’s biggest investment project.
As Slovenia was scheduled to hold parliamentary elections in June, president Pahor announced on Thursday he preferred an early election (most likely in mid-May), rather than appointing a prime minister-designate.
Erste noted that Cerar's move could be seen as a bid to secure more votes in the upcoming election.
"We see the Supreme Court’s ruling as a trigger for PM’s Cerar resignation, as his CMC party was lagging being in the polls for the upcoming election, so this could also be seen as pre-election move to improve its current rating," Erste said.
On Wednesday last week, the Supreme Court of Slovenia, said the outcome of the referendum held in September last year, in which a majority of Slovenians voted to support the construction of a second track of the Divaca–Koper railway should be annulled as government campaigning for the project could have affected the final results.
Last week, Erste announced it has increased its forecast for Slovenia’s economic growth in 2018 to 4.5%, from 4.0% predicted earlier, on the back of higher-than-expected economic expansion last year.
Slovenia finished 2017 with economic expansion of 5.0%.