December 2 (SeeNews) - The Organisation for Economic Co-operation and Development (OECD) said it has revised its forecast for Slovenia's economic growth in 2021 to 5.9% from 3.5% predicted in May.
"Economic growth is projected to recover to about 5.9% in 2021 and 5.4% in 2022, and moderate to a still robust 3.2% in 2023," OECD said in its latest economic outlook on Slovenia on Wednesday.
Domestic demand will be the main driver of growth, as higher real incomes will boost private consumption, while investment will increase on the back of increasing capacity constraints and larger inflows of EU funds that should help accelerate the green and digital transitions, OECD said.
"Headline inflation will rise, and reach 3% by 2023, reflecting high energy prices, supply side constraints and a tighter labour market," OECD noted.
With gradual fiscal policy tightening, the public deficit will reach 3% of GDP in 2023, OECD said. "As the recovery becomes self-sustained, a more neutral fiscal policy stance would help to prepare the public finances for upcoming ageing-related spending pressures."
Slovenia's economic output rose by a real 4.8% year-on-year in the third quarter of 2021 and by 1.3% compared to the second quarter, according to data from the country's statistical office.
In 2020, Slovenia's economic output contracted 4.2% as a result of the coronavirus crisis.