LJUBLJANA (Slovenia), July 7 (SeeNews) – The European Commission (EC) said on Tuesday it has kept unchanged its forecast for Slovenia's economic performance this year, expecting it to shrink 7%.
At the same time, the Commission has cut its 2021 economic growth forecast for Slovenia to 6.1% from 6.7% predicted in May, it said in its Summer 2020 Economic Forecast report.
"The COVID-19 pandemic put an end to several years of healthy growth in Slovenia. As in other countries, the economy has been strongly affected by containment measures and the collapse in international trade," the Commission said, adding that the government's large-scale support measures have limited the damage on companies and employment.
"Slovenia has advanced significantly with its re-opening process, having removed most of the restrictions and established lists of countries from where it is safe to travel without quarantine."
The commission added that a recovery in consumption is expected to take place in the second half of 2020, thanks to the fact that household incomes have been maintained.
At the same time, the recovery in investment will be held back by the still very high uncertainty.
However, the Commission pointed out that the registered unemployment has stabilised in June, while the confidence indicators have been improving since May.
Consumer price inflation is seen at 0.2% in 2020, and at 1.1% in 2021.
The Commission expects the economy of the euro area to shrink 8.7% this year, compared to a 7.7% drop predicted in May. It also now predicts an overall 8.3% contraction for the EU economies in 2020, worse than the 7.4% decrease forecast made in May.