August 26 (SeeNews) - Slovenia economy is likely to grow by 5.5% this year on the back of domestic demand, but an economic slowdown to 2.6% can be expected next year, Raiffeisen Research said.
"Despite rising inflationary pressure, uncertainty and still-present supply chain disruptions, 2022 will bring broad-based and still strong growth driven by domestic demand, mainly consumption and investment, while exports of goods have begun to suffer from lower foreign demand," Raiffeisen Research said in a commentary posted on Thursday.
"This may be an introduction to a likely slowdown in 2023. This is inevitable not only due to the base effect but also due to the many threats and a potential industry stagnation or even recession in the upcoming winter," it added.
Great uncertainty, elevated inflation and energy vulnerability of the Slovenian economy pose the biggest risks to the GDP forecast for 2023, Raiffeisen Research also said.
Although gas represents around 14% of total energy consumption, it is a key input for some metallurgy, chemical and paper companies that would struggle to find alternatives, especially since Slovenia has no domestic storage capacity, it noted.
Slovenia's annual GDP growth stood at a real 8.2% in the second quarter and at 9.8% in the first quarter of the eyar, according to data from the country's statistical office.
Slovenia's inflation is expected to average 9.1% this year, before decreasing to 4.4% in 2023 and 2.3% in 2024, according to Raiffeisen Research.