The Slovenia Times

EU Commission downgrades still stellar GDP forecast for Slovenia


While this is the first downgrade for Slovenia by any of the domestic or foreign institutions in a long time, the remarks coming from Brussels are similar to those of domestic institutions.

In the first quarter of 2018, Slovenia's economy grew by 0.7%, compared to the previous quarter and by 5.0% compared with the same quarter in 2017.

Export growth diminished due to lower foreign demand, while imports, consumption and investment continued to expand.

Economic sentiment fell somewhat in the first half of 2018 compared to the end of 2017 but remained at a very high level, the Commission wrote.

"While external demand has grown less than previously expected, Slovenia's exports are likely to benefit from a good competitive position."

Still, exports' growth contribution is likely to turn negative as domestic demand strengthens, supported by growing employment, wages and favourable financing conditions.

The Commission also expects business investment growth to "continue at a rather high rate on the back of high capacity utilisation and a tightening labour market amid stronger balance sheets and improved profitability".

In the public sector, a more intensive use of EU funds for investment projects is forecast for 2018 and 2019.

Overall, price pressures are expected to increase, leading to a projected inflation of 2.1% this year and 2.2% next year, 0.2 percentage points more in both cases than in the spring forecast.


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