LJUBLJANA (Slovenia), February 11 (SeeNews) – The European Commission has revised downwards its economic growth forecast for Slovenia in 2021 to 4.7% from 5.1% projected in November, it said on Thursday.
"The pandemic and its associated restrictions continue to exert a strong influence over the economy in early 2021, particularly in the services sector. Industrial production and construction are expected to be less affected. The economic situation is expected to gradually improve as more people are vaccinated and restrictions are relaxed, leading to stronger growth in the second half of the year," the Commission said in its Winter 2021 Economic Forecast report.
The Commission sees Slovenia's gross domestic product (GDP) rising 5.2% in 2022, driven by the same factors as in 2021.
Going back to 2020, the EU Commission estimates Slovenia’s GDP to have contracted by 6.2%, versus a 7.1% decline forecast in November.
"The recovery in the third quarter of last year, however, was followed by a strong resurgence in COVID-19 infections and the introduction of new restrictions in the fourth quarter that dampened economic sentiment and reduced private consumption significantly. The impact of the crisis was softened by extensive government measures to support employment and limit insolvencies. Still, employment decreased and the unemployment rate increased slightly," the EU's executive body said.
Consumer price inflation is seen at 0.8% in 2021, while in 2022 it is expected to reach 1.7%, taking into account the projected recovery and assumed increase in energy prices.
The Commission expects economic growth in the EU at 3.7% in 2021 after a 6.3% decline last year.