IMF keeps GDP growth forecast for Slovenian unchanged
The IMF's forecast for 2019 remains roughly on par with that of other international and domestic institutions, whose projections for this year have ranged between 3.3% and 3.6%.
As for next year, the IMF's projection is among the more reserved, with the government's economic think tank IMAD for instance announcing 3.1% in its spring forecast, while Banka Slovenije and the European Commission projected the GDP to rise by 3%.
The IMF expects a 1.4% inflation rate for this year in Slovenia and 1.6% next year. By 2024, the rate is expected to return to 2%, which is the medium-term goal of the European Central Bank (ECB).
The survey unemployment rate is expected to drop from 5.3% last year to 4.8% this year, and then to increase slightly next year to 4.9%.
While there is no commentary on Slovenia in the report, the IMF said at the end of 2018 as its regular mission concluded a visit to the country that Slovenia should take structural measures which would enable greater welfare in the long run.
It sees a fast ageing of the population as the main challenge, as it puts tremendous pressure on public finances.
Structural challenges include a low growth in productivity, shortage of labour force and high taxes, as well as a demanding regulatory system and a large number of companies being in state ownership.
The political priorities Slovenia should pursue are maintaining the results of fiscal consolidation by keeping a balanced structural budget and avoiding a procyclical public fiscal policy, something for which the 2019 is being criticised.
The IMF also proposes structural reforms, in particular pension and health reform, and better regulation of long-term care, wages in the public sector and taxes.
It has also called for banks and companies to clean balance sheets, for a greater flexibility of the labour market and faster privatisation.