May 10 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday it has lifted its forecast for Slovenia's economic growth to 2.5% in 2017, from an earlier predicted 2.3%.
In 2018, the EBRD sees Slovenia's GDP growth slowing to 2.2%.
"Domestic demand will be the main growth driver, mainly on the back of improved labour market conditions, previously announced large investment projects and an expected recovery in EU fund absorption," the lender said in its latest Regional Economic Prospects report.
"The contribution of net exports is expected to be negligible, as imports will catch up with exports on the back of rising domestic demand," the EBRD added.
It warned that risks to the projection relate to high corporate over-indebtedness, and the slow pace of business environment reforms and privatisation.
Slovenia's economy expanded by 2.5% in 2016, accelerating from 2.3% growth a year earlier.
The EBRD expects economic growth to pick up across the EBRD regions this year and next, supported by higher oil prices and Russia’s recovery from recession. In 2017, GDP growth in the EBRD's region of operation is expected to accelerate to 2.4%, from 1.8% last year, before picking up further to 2.8% in 2018.