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Slovenia must boost investment in innovation, infrastructure to maintain growth - EU

Slovenia must boost investment in innovation, infrastructure to maintain growth - EU Source: Slovenian government

LJUBLJANA (Slovenia), February 26 (SeeNews) – Slovenia needs to increase investments in innovation and infrastructure, including environment, transport and energy sectors, in order to ensure sustained economic growth, the European Commission said on Wednesday.

“The innovation potential of the economy is hampered by: rather low public investment in research and innovation, limited science-industry cooperation and uneven innovation and digital capacities among firms,” the European Commission said in its 2020 country report for Slovenia.

Sustainable transport connections, in particular rail, are not sufficiently developed to fully support a carbon-friendly modal shift or the economic development of less-developed regions, the Commission said. The share of renewable energy remains low and the transition away from coalmines and coal-powered electricity production is at an early stage, it added.

“The ageing of Slovenia’s population means that significant investments are necessary to ease pressure on the healthcare and long-term care systems,” the Commission also said.

In 2019, Slovenia’s economy is expected to expand by 2.5%, compared to a growth rate of over 4% in 2018, mostly driven by domestic demand, the EC noted, adding that economic growth is expected to slowly accelerate to 2.7% in both 2020 and 2021.

Unemployment is expected to stabilise at 4.2% in 2020 and 2021, and inflation is seen accelerating only slightly from 1.7% in 2019.

The Commission also said that Slovenia’s banking sector has improved steadily, but alternative sources of finance are not sufficiently developed to support innovation and growth. The state still plays a dominant role in some crucial sectors, such as insurance and telecommunications, and there are plans to increase its role in tourism which, according to the Commission, could hamper competition and efficient resource allocation.

Although the business environment has improved, problems remain in public procurement and administrative/regulatory burden, the Commission also said.