LJUBLJANA (Slovenia), February 7 (SeeNews) – The European Commission said on Thursday it has lowered its forecast for Slovenia's economic growth this year to 3.1% from 3.3% projected in November.
“Slovenia’s economic growth is estimated to have reached 4.4% in 2018, compared to 4.9% in 2017,” the European Commission said in its Winter 2019 Economic Forecast report.
Real GDP growth is expected to slow further to 2.8% in 2020, the European Commission said.
In 2018, growth was broad-based, driven by both strong investment dynamics and consumer spending, as well as net exports, the statement added.
“Economic sentiment remains above its long-term average. Although it worsened over the course of 2018, it improved somewhat in the final months of the year,” report noted, adding that job creation remained steady and unemployment further declined to 5% in the third quarter, reaching a level last seen in 2008.
With strong employment and continued wage growth, consumption is set to strengthen over 2019 and 2020, the Commission said, adding business investment activity also is expected to remain buoyant amid favourable financing conditions, high levels of capacity utilisation and supply constraints appearing in some sectors.
“Net exports’ contribution to growth is expected to turn negative over the forecast horizon, amid slower growth in export markets and sustained domestic demand growth,” the statement noted.
Inflation slowed somewhat at the end of 2018, with headline inflation reaching an average rate of 1.9% for the year - up from 1.6% in 2017, it added. Overall, consumer price inflation is forecast to average 1.9% in 2019 and 2.1% in 2020.