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UPDATE 1-Slovenia sees lower '09 growth than fcst in Dec

Published 02/06/2009, 05:36 AM
Updated 02/06/2009, 05:40 AM

(Updates with quotes, details)

LJUBLJANA, Feb 6 (Reuters - Slovenia expects its 2009 growth to be closer to 0.6 percent rather than the 1.1 percent forecast in December, the government's Institute of Macroeconomic Analysis and Development said on Friday.

"Data shows that we will be closer to our alternative scenario, which was similar to the European Commission's forecast that Slovenia's growth would reach 0.6 percent this year," head of the institute Bostjan Vasle said told a news conference.

He also said a technical recession -- two consecutive quarters of negative growth -- cannot be excluded this year, although it is not expected.

"Regarding technical recession ... we cannot exclude this possibility but so far all local and international forecasts show that Slovenia will be one of the few states in the euro zone which will this year not fall into technical recession."

However, according to Vasle the first quarter of 2009 will be one of the worst for Slovenia since its independence in 1991 due to continuous economic slowdown and rising unemployment.

He said the number of unemployed this year is expected to rise by 15,000, adding the global financial and economic crisis has not reached its bottom yet and that improvement might only happen next year.

Slovenia had 63,363 jobless in November when unemployment reached 6.7 percent.

Vasle also urged the government and trade unions to postpone the agreed public sector wage increases of about 10 percent this year due to worsened economic conditions.

(Reporting by Marja Novak, edited by Chris Pizzey)

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