The Slovenia Times

EU Commission keeps Slovenia forecast at -7% for this year


In the report, the Commission says that the "Covid-19 pandemic put an end to several years of healthy growth in Slovenia. As in other countries, the economy has been strongly affected by containment measures and the collapse in international trade."

It notes that in the first quarter, Slovenia's economy contracted by 4.5% compared to the last quarter of 2019. "As the second quarter was more affected by confinement measures, the decline in GDP is expected to be even steeper."

However, the economic outlook for Slovenia for this year is better than for the eurozone as a whole, which is projected to see a 8.7% drop in GDP this year, which is a full percentage point more than the contraction projected in the spring.

The report also notes that the rise in unemployment has been rather modest so far, due to the support measures. "Registered unemployment had already stabilised in June and confidence has been improving since May."

As household income has been maintained, a recovery in consumption is expected to be quite rapid in the second half of the year. On the other hand a recovery in investment is expected to be held back as uncertainty remains very high.

As for inflation, the report says that it slowed in the beginning of the year, with the harmonised index of consumer prices being 0.8% lower in June year-on-year.

Upward price pressure is expected to be low also during the second half of the year. Overall, consumer price inflation is forecast at 0.2% year-on-year in 2020 and 1.1% year-on-year in 2021.


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