LJUBLJANA (Slovenia), February 27 (SeeNews) – Slovenia needs to increasing investment and address challenges related to its ageing population in order to be more resilient to future economic shocks, the European Commission said on Wednesday.
“Investment is growing, but it is still below the EU average as a share of gross domestic product (GDP), which slows down Slovenia’s convergence in terms of productivity,” the European Commission said in its 2019 country report for Slovenia.
The ageing of the population is putting a strain on the pension, healthcare and long-term care systems, the report added.
In 2018, Slovenia’s economy is expected to expand by 4.4%, compared to a growth rate of 4.9% in 2017 mostly driven by investments, the report noted, adding that economic growth is expected to slow to 3.1% in 2019 and 2.8% in 2020.
“Helped by economic growth, the unemployment rate fell to 5.6% in 2018, and is expected to fall further in 2019 and 2020,” the EC noted. The rate of long-term unemployment was less than 3% at the end of 2018, which is still above the pre-crisis level but below the average rates in the EU and the euro area.
According to the report, the inflation rate stabilised at 1.9% in 2018, driven mainly by energy and fuel prices.
“Overall, Slovenia has made limited progress in addressing the 2018 country-specific recommendations,” the Commission noted.
The report also said that the situation of the Slovenian banking sector has improved significantly, but challenges remain and new risks emerge.
“With the partial privatisation of NLB in November 2018 and the initiation of the privatisation of the third largest bank, Abanka, by mid-2019 Slovenia is making good progress with privatisation in the banking sector,” the report noted, adding that the state still plays a dominant role in many sectors. “This carries a risk of distortion in competition and resource allocation.”
In conclusion, the report noted that although the business environment is improving, restrictive regulations and administrative burden remain, as well as certain weaknesses in public procurement remain.
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