Erste Bank Research Team
Erste Bank
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Disappointing 2Q output putting pressure on the FY24 outlook.
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ECB: next interest rate cut in October.
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Yields moving below 3% mark.
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Weaker dollar expected.
GDP growth decelerated to 0.7% y/y in 2Q24. A detailed breakdown revealed support from both private and public consumption, while investments and net exports weighed on the headline figure. Looking ahead to 2H24, we see domestic demand as the main growth driver, with modest but improving performance expected in private consumption and investment. However, weak growth in Slovenia’s main trading partners is likely to dampen the export outlook. GDP is expected to increase by around 1.5% this year, followed by a strengthening growth profile in the 2025-26 period.
We saw significant inflation moderation, with the latest CPI figure for August landing at 0.9% y/y. We expect inflation to remain at lower levels by year-end before gradually increasing above the 2% mark in 2025 due to the base effect and the expiration of temporary measures. The fiscal position is expected to remain stable, with consolidation resuming from 2025 onwards. On the financing side, the situation remains comfortable, with active YTD issuance covering around two-thirds of this year’s financing needs.
This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.
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