Business News

EU Commission slightly improves forecast for Slovenia

Brussels, 10 July (STA) - The European Commission has slightly improved its economic growth forecast for Slovenia. It projects that Slovenia's economy will expand by 3.2% this year, up from its earlier forecast of 3.1%, while retaining the growth rate for 2020 at 2.8%.

Slovenia's growth will thus continue to significantly outpace average growth in the eurozone, where it is projected to stand at 1.2% and 1.4%, and the EU27, which as a whole is forecast to grow at rates of 1.4% and 1.6%, respectively.

In its summer forecast released on Wednesday, the Commission says that growth in the first quarter of this year remained robust and even if growth rates will slow down from 4.5% recorded last year, consumption, one of the two principal drivers of growth, is expected to strengthen due to strong employment and wage growth.

"Although investment growth is set to moderate compared to the very high level of 2018, favourable financing conditions, high levels of capacity utilisation and a more intensive use of EU funding suggest that it may remain an important growth driver," the Commission says.

But it also warns that at the beginning of 2019, import growth exceeded export growth, "suggesting that the positive contribution to growth of net exports may not last".

Consumer price inflation is forecast to average 1.7% in 2019 and 2.0% in 2020. Energy prices are expected to have a somewhat lower impact on inflation than previously forecast, but wage increases are expected to create "some upward pressure on prices".

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