The Chamber of Commerce and Industry (GZS) forecasts a baseline-scenario GDP growth of 1.1% for Slovenia in 2023. Growth is expected to pick up to 2.3% in 2024 and to 3.0% in 2025.

The GZS's analysts, who still projected 3.2% growth for 2023 in April, expect household and government spending to increase by 1.5% next year and gross investment to rise by 4.0%.

Exports are expected to increase by 2.5% and imports by 3.5%, the chamber announced on Monday as it launched its Institute for Strategic and Economic Research (ISGR), which will be headed by economist Bojan Ivanc, who also runs the GZS's analytics department.

Ivanc described the outlook for the period up to 2025 as relatively favourable. He does not expect a recession in terms of the impact on the labour market and economic activity. But a technical recession, defined as a contraction of GDP in two consecutive quarters, in the last quarter of this year and the first quarter of next year, could occur.

For this year, however, 5.8% GDP growth is expected, a 2.1 point upgrade from April. The baseline scenario does not entail any generally negative trends, especially not in employment. Still, it is projected that there will be a net 5,000 fewer jobs in 2023 than this year.

Under the pessimistic scenario, GDP would stagnate in 2023, but grow by 1.5% and 3.7% in 2024 and 2025. Under the optimistic scenario, growth would be 2.5% in 2023 and 2.9% and 3.0% in the two years to follow.

As for the main risks in the coming three years, Ivanc noted a possible hybrid and economic war between Russia and the West, with sabotage of energy and digital infrastructure affecting commodity and energy markets. Geopolitical risks in the Middle East and the South China Sea could lead to a disruption of supplies from Asia, and the Covid-19 pandemic could get worse, which could lead to delays in supplies and fluctuations in consumption.

The GZS expects 5.8% inflation next year, 2.6% in 2024 and 2.0% in 2025. Following a decline in real wages this year, wages are expected to rise by 0.7% in 2023, 1.6% in 2024 and 1.2% in 2025.

Speaking of questions that remain open, Ivanc wondered how much longer expansionary fiscal policy can be expected in a context of tightening monetary policy, whether political pressure on the independence of central banks will increase, and whether the fall in consumer confidence and the rise in interest rates on deposits could contribute to a rapid rise in saving, and thus to lower growth or a recession.

The GDP growth forecast by the GZS the is slightly lower than projected by most other institutions. In its autumn forecast for 2023 and 2024, the Office for Macroeconomic Analysis and Development projected 1.4% and 2.6%, and Banka Slovenije forecast 2.4% and 2.5% in June. The IMF forecast 1.7% growth for 2023 in October, the EBRD 1.8% in September, the OECD 2.5% in June and the European Commission 1.0% in July.