Abstract
We forecast Slovenia to fall into its first recession in 17 years in 2009,
with a real GDP contraction of
1.7% pencilled in. External factors are key
for the macroeconomic outlook. Not only do we expect
exports to tumble by
8.0%, but capital inflows too are likely to contract, weighing on domestic
credit
growth and capital investment. It is important to note though, that
despite the economic trend being
driven by external factors, from an
expenditure component basis, the slide in domestic demand will be the
primary contributor to negative GDP growth. Private consumption is expected to
contract by 3.0% in
2009, while gross fixed capital formation is forecast
to decline by 4.0%. This will translate into a sharp
drop off in imports
by 8.5% (in real terms). Therefore, we expect the effects of the regional
macroeconomic trends on the net trade component to be positive for growth.
As capital inflows dry up and economic activity decelerates, we expect
unemployment to spike
considerably. Having already risen to 7.0%
(registered unemployment) at end-2008, we forecast
joblessness to rise
further to 10.0% by the end of this year. With real wage growth forecast to
fall in line
with the loosening of the labour market, this will reinforce
the negative outlook for domestic
consumption.
Beyond 2009, we
forecast a modest recovery to 2.3% growth in 2010 though maintain that trend
growth
will settle much lower than in the pre-2008 period. Indeed, we
expect real GDP growth to average 3.5%
between 2011 and 2013, down from
the 5.7% seen in the three years leading to 2007.
In Central and Eastern
Europe (CEE), we profile 22 multinational insurance companies. In
alphabetical
order, these are AEGON, AIG, Allianz, Aviva, AXA, Cardif,
ERGO, Eureko, Fortis, Generali,
GRAWE, Groupama, HDI-Gerling, HSBC
Insurance, ING, MetLife, Prudential Financial, QBE,
RSA, UNIQA, Vienna
Insurance Group and Zurich Financial Services.
Over the course of 2008,
estimated total premiums in Slovenia rose by 10% to EUR2,292mn. Non-life
premiums rose by 9% to EUR1,647mn, while life premiums rose by 13% to
EUR645mn.
Between now and the end of the forecast period, we expect that
annual non-life premiums will grow by
EUR574mn, while annual life premiums
should grow by EUR655mn.
Growth in non-life premiums should be driven by
the general growth of nominal GDP plus a rise in nonlife
penetration from
the current level of 4.7% to 5.0%.
Growth in life premiums should be
driven by the change in the overall population and a rise in life density
from US$439.33 to US$796.52 per capita.
BMI' s Insurance Business
Environment Rating is 62.0.
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