Austerity without growth won’t work for Slovenia

Slovenia’s debt problems are not as severe as those of other Southern European economies, but its public debt is nonetheless on an unsustainable footing. Moreover, given the backdrop of private sector deleveraging at home and recession in key export markets, it’s difficult to see an easy way out for the Slovenian authorities. Needless to say, all of this supports our view that the economy will experience a deeper recession this year than most seem to expect.