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IMF sees Slovenia's GDP shrinking in 2020 over coronavirus, offers crisis funding - fin min

Author Iskra Pavlova
IMF sees Slovenia's GDP shrinking in 2020 over coronavirus, offers crisis funding - fin min IMF Author (bnm) License: all rights reserved.

LJUBLJANA (Slovenia), March 25 (SeeNews) - The International Monetary Fund (IMF) expects the Slovenian economy to contract this year as a result of the ongoing coronavirus crisis, and is offering financial support via its crisis funding, the Slovenian finance ministry said.

The IMF team anticipates negative growth in Slovenia in 2020, as well as lower than expected inflation and a fiscal deficit due to drop in incomes and higher expenses as a result of the anti-coronavirus incentive measures, which will probably also cause a negative fiscal balance in 2021, the finance ministry said in a statement on Tuesday. The statement was issued following a March 20 conference call between finance minister Andrej Sircelj and the head of the IMF mission to Slovenia, Bernardin Akitoby.

The IMF noted that Slovenia should be careful when taking new borrowing in order not to raise too much its government debt in the long run.

The statement recalled that the IMF has offered $50 billion (46 billion euro) worth of funding via its crisis instruments to help governments fight the coronavirus and its impact. Out of the total, developing countries can apply for interest-free loans of up to $10 billion via the Fund's Rapid Credit Facility (RCF), while the remaining $40 billion are made available for the remaining countries, with more than 80 states expected to apply for the support.

Slovenia could apply for up to 800 million euro, which is 100% of its IMF membership quota, via the Fund's Rapid Financing Instrument, the finance ministry read. It can also ask for more funding, if it suffers damages equivalent to more than 20% of its GDP.

The IMF crisis funding could be drawn over a period of two years, and should be repaid in eight installments within a period of three to five years following the withdrawal of each tranche, the statement read.

In October, the IMF said it expects Slovenia's economy to growth 2.9% in 2020.

On Monday, however, the government's Institute of Macroeconomic Analysis and Development, UMAR, said that the country's economy may shrink by up to 8% this year, hit by the ongoing coronavirus crisis, and if the present state continues for more than two months, the economic contraction could be double-digit.

($=0.925104 euro)