LJUBLJANA (Slovenia), July 10 (SeeNews) – The European Commission said on Wednesday it has slightly increased its forecast for Slovenia's economic growth this year to 3.2% from 3.1% projected in May, as consumption is expected to remain strong.
“Slovenia’s economic growth reached 4.5% in 2018. Growth was driven mainly by domestic demand, in particular by strong investment dynamics,” the European Commission said in its Summer 2019 Economic Forecast report.
Although investment growth is set to moderate this year 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 said.
“At the beginning of 2019, import growth exceeded export growth, suggesting that the positive contribution to growth of net exports may not last,” the EC added.
The growth of the Slovenian economy is expected to slow down to 2.8% in 2020.
“HICP inflation was 1.3% in the first quarter of 2019. Due to the assumed fall in fuel prices, energy prices are expected to have a somewhat lower impact on inflation than previously forecast,” the Commission said.
On the other hand, wage increases, particularly in the services sector, are expected to create some upward pressure on prices, the EC noted, adding that overall, consumer price inflation is forecast to average 1.7% in 2019 and 2.0% in 2020.