September 20 (SeeNews) - Erste Group said it has lifted its forecast for Slovenia’s economic growth to 4.0% in 2017, from 3.7% projected in August, as both domestic and external demand are expected to maintain their positive contribution.
The forecast for Slovenia’s gross domestic project (GDP) growth in 2018 has been raised to 3.3% from 3.2%, while a 3.0% increase is expected in 2019, Erste Group's analysts said in their latest macroeconomic outlook report on Slovenia published on the bank's website earlier this week.
"Inflation is seen keeping a stable footprint for the rest of the year, which should result in an average figure close to 1.5% in 2017," the analysts said. " We expect the consolidation process on the fiscal side to continue in 2017, although at a more moderate pace than seen in 2016, while the public debt trajectory should keep its decreasing trend and move further down to the 70% of GDP mark."
The growth slowdown to 4.4% in the second quarter from 5.1% in the first three months of 2017 came at the cost of a lower domestic demand contribution, as growth footprint on both the private consumption and investment sides was somewhat milder, the analysts said.
"We see no major changes in the growth footprint for the remainder of the year, with both domestic and external demand keeping a positive contribution," they added.
Labour and credit market trends, along with improving consumer sentiment, should remain supportive for private consumption, while investment activity is set to remain strong, on the back of the private sector and further accelerating EU fund momentum, Erste said.
In August, Erste said it has affirmed its outlook for Slovenia's economic growth at 3.7% in 2017.