LJUBLJANA (Slovenia), May 7 (SeeNews) – The European Commission said on Tuesday it affirmed its February forecast for Slovenia's economic growth in 2019 at 3.1%.
“Economic growth reached 4.5% in 2018 but is expected to slow somewhat in 2019 and 2020 as the external environment weakens, leaving domestic demand as the main driver of growth,” the European Commission said in its Spring 2019 Economic Forecast report.
Investment growth is expected to remain strong, the Commission said, adding that the labour market is tightening, pushing wages up.
“The government budget surplus is forecast to grow due to favourable economic conditions and the structural position should improve in 2020,” the report reads.
The growth of the Slovenian economy is expected to slow down to 2.8% in 2020.
Growth in 2019 and 2020 is expected to come from domestic demand, as net exports turn negative. Private consumption is expected to continue to enjoy the support of rising employment and wages, as well as favourable bank lending conditions.
“Negative risks to the growth outlook are mainly external,” the Commission noted, adding that slower export demand growth would affect both exports and business investment.
“On the upside, households could lower their saving rate and increase consumption.”
The report also noted employment is forecast to grow by 2.3% in 2019 before easing to 2.1% in 2020, whereas the unemployment rate is projected to fall to 4.6% in 2020, which would be below its long-term average.