April 8 (SeeNews) - The World Bank has lowered its 2016 GDP growth forecast for Slovenia to 1.8% from 2.1% projected in January, but has improved its outlook for the next two years.
The projections for 2017 and 2018 were increased to 2.2% and 2.4%, respectively, from previously expected 2.0% for both years, the World Bank said in a report released late on Thursday.
The deceleration of growth from 2.9% last year to 1.8% this year will be caused mainly by lower public investment as previous programming period of the EU funding came to the end, the bank said.
The subsequent strengthening of economic activity is set to be driven by private consumption, reflecting further growth in disposable income amid improving consumer confidence and labor market conditions, and private investment which is expected to accelerate gradually due to lower indebtedness but also improved access to finance.
The institution expects fiscal consolidation to continue, with the budget gap narrowing from 2.9% of GDP in 2015 to 2.7% in 2016, 2.1% in 2017, and 1.9% in 2018, supported by economic recovery but also by government measures.
"The Commission could in 2016 stop the excessive deficit procedure, which it launched in December 2009, as Slovenia is on track to bringing the deficit below the 3 percent of GDP ceiling," the bank said.
It noted also that the country's current account surplus is projected to remain high, at 7.8% of GDP this year, 7.5% next year, and 7.2% in 2018, as long as deleveraging in the corporate sector continues.
The debt-to-GDP ratio is seen declining from 83.6% at end 2015 to 80.3% in 2016, 79.5% in 2017, and 78% in 2018.