May 17 (SeeNews) - The European Commission has downgraded its economic growth forecast for Slovenia in 2022 to 3.7% from 4.2% predicted in November, it said.
"According to high-frequency indicators, Slovenia’s economy continued to grow in the first quarter of 2022. GDP is expected to continue expanding, by some 3.7% and 3.1% in 2022-23 respectively despite the negative effects arising from price increases, supply bottlenecks and the fall of confidence in light of Russia’s war of aggression against Ukraine," the Commission said in its Spring 2022 Economic Forecast report.
Despite the erosion of real incomes driven by inflation, private consumption is projected to expand on the back of continued employment growth, higher disposable income, the recently adopted tax reform and the utilisation of accumulated savings, the EC said.
"Price and demand pressures and increased uncertainty are expected to have strong negative effects on private investment. This will be somewhat offset by a strong public investment thanks to the utilisation of significant residual structural funds and RRF-financed investments," the EU's executive body said.
Slovenia's consumer price inflation is seen at 6.1% in 2022, while in 2023 it is expected to moderate to 3.3%. Regarding employment, 0.9% in 2022 is expected to be followed by 1.5% growth in 2023.
The general government debt is projected to rise to 74.1% of GDP in 2022, and 72.7% in 2023.