Slovenian govt think-tank cuts 2024 GDP growth f'cast

"Economic developments will be favourably influenced by further investment growth, easing inflationary pressures and the recovery of foreign demand, which is somewhat slower than autumn expectations," UMAR said in a statement on Wednesday.

UMAR expects a rebound in goods exports following last year's contraction, alongside slightly higher growth in manufacturing value-added activities, while the expansion of service exports will primarily depend on the growth of tourism-related services. "Growth in the export sector will be limited by deteriorating competitiveness resulting from increased domestic cost pressures, especially labour costs," UMAR said.

The institute noted that further investment growth is expected, driven by the country's sustained high investment activity, which includes reconstruction efforts after the floods and the implementation of the Recovery and Resilience Plan. Additionally, renewed investments in equipment and machinery, coupled with export recovery, as well as significant growth in housing investments, are expected.

"According to our expectations, inflation will gradually moderate for most of the year this year, but at the end of this year or the beginning of next year, it may rise slightly again due to the base effect (expiration of measures to curb high energy prices). According to our estimate, inflation will approach 2% in 2026," UMAR added.

Last month, the European Commission slightly downgraded its economic growth forecast for Slovenia in 2024 to 1.9% from 2.0% projected in November. Slovenia's economy is expected to expand by 2.7% in 2025, the Commission said in its Winter 2024 Economic Forecast report.