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Bulgaria's economy grows 1.8% y/y in Q3 - prelim data
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Nov 09, 2017 15:41 EEST
November 9 (SeeNews) - The European Commission said on Thursday it has raised its forecast for Slovenia's economic growth this year to 4.7% from 3.3% projected in May, to be driven by exports, private consumption and investment.
In the first six months of 2017, Slovenia surpassed its pre-crisis peak with growth of 4.8%, on the back of expanding domestic demand, growing private consumption and higher exports, the European Commission said in its Autumn 2017 Economic Forecast.
Solid growth is set to continue through to the end of 2017, before slowing slightly to 4.0% in 2018 and 3.3% a year later.
Private consumption is expected to remain strong over the forecast horizon, supported by growing employment, wages and bank lending.
Similarly, investment is expected to grow at a high rate due to the combination of strong external and domestic demand with improving financing conditions and stronger corporate balance sheets.
Export performance is expected to remain robust, supported by stable unit labour costs and continued gains in price competitiveness.
Risks to the growth outlook are tilted to the upside, the European Commission said, adding that these risks are primarily domestic in nature, as improving sentiment and better access to credit could further support investment, particularly in residential properties.
Downside risks are mainly external and relate to the future course of the prices of energy and raw materials.
The EC predicts harmonised consumer prices will increase by 1.6% in 2017, 1.5% in 2018 and 1.8% in 2019 in Slovenia.
In terms of the country's budget, the government deficit is expected to decline to 0.8% of GDP in 2017 as a result of strong tax revenues and social contributions.
In 2018, the general government budget is expected to be balanced, as tax revenues and social contributions continue to grow strongly, while in 2019 a budget surplus equivalent to 0.4% of GDP is predicted due to economic growth and improved labour market conditions.
The main downside risks to public finances over the forecast horizon stem from building expenditure pressures, particularly on wages and pensions, the EC warned.
Slovenia's debt-to-GDP ratio peaked at 82.6% in 2015 and decrease in 2016 to 78.5%.
Supported by the economic recovery and reduced precautionary cash buffers, public debt is forecast to decline steadily to 72.0% of GDP in 2019, the Commission said.
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