The Slovenia Times

EU Commission downgrades Slovenia's growth forecast


Both GDP figures are still much above the eurozone averages of 2.1% and 1.9%, data released by the Commission on Thursday shows.

The Commission considers Slovenia's growth for the projected period to be "solid", noting it remained strong in the first half of 2018 after Slovenia's economy expanded by 4.9% in 2017.

The figure for 2018 was downgraded compared to the May forecast mostly due to an expected slowdown in Slovenia's main export markets in the second half of the year.

In 2020, the country's growth is projected to slow further, to 3.0%.

The growth forecast from Brussels is still lower than that of the Slovenian government forecaster IMAD from September.

Having downgraded its projections for 2018 and 2019 two months ago, IMAD expects Slovenia's GDP to grow at 4.4% this year and at 3.7% next year.

The unemployment rate is also forecast to continue to drop, from 6.6% in 2017 to 5.6% in 2018, and to 5.1% in 2020.

Inflation is expected to reach 2.0% this year and rise to 2.3% in 2019, driven by energy prices and the expected wage growth.

Under a no-policy-change scenario, the Commission says Slovenia's public finances are expected to remain in surplus but to worsen in structural terms.

In 2018, the general government surplus is to improve to 0.5% of GDP from 0.1% last year as revenue from taxes and social contributions is forecast to further accelerate due to strong labour market performance; employment in 2018 is set to grow by 3.0%.

In 2019, the surplus is forecast to slightly decrease to 0.4% of GDP.

The Commission believes the main downside risks to public finances over the forecast period come from expenditure pressures on wages and social benefits.


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