Brussels, 15 November (STA) - The European Commission has downgraded its gross domestic product (GDP) growth forecast for Slovenia for this year from 2.3% to 1.4%. Its 2025 forecast has been slightly downgraded, by 0.1 percentage points to 2.5%. A 2.6% GDP growth is meanwhile expected in 2026.
The European Commission says in its autumn forecast that growth is expected to pick up in the second half of the year in Slovenia, but it will remain modest, while it is expected to be robust in 2025 and 2026.
Export demand will remain rather weak, and investment growth subdued, especially for construction, adds the report released on Friday.
Thus, the European Commission expects that the Slovenian economy will expand by 1.4% in 2024, a downgrade of 0.9 percentage points compared to the May forecast from Brussels.
In 2025, Slovenia's GDP growth is projected to stand at 2.5%, which is a 0.1 point downgrade from May, while in 2026 it is expected to increase to 2.6%.
Private consumption is projected to grow strongly in the next two years, supported by employment growth and rising real wages.
Investment is set to accelerate due to the expected implementation of measures financed from the Recovery and Resilience Facility and due to cohesion policy projects.
Investment in machinery and equipment is also expected to increase due to improving financial conditions and higher exports demand. At the same time, imports are set to pick up, in line with higher consumption and investment.
The report notes that the moderation in inflation has continued in 2024 and inflation is forecast to ease to 2.1% for the year as whole. It is expected to accelerate somewhat in 2025 (3.2%), as consumers are set to face higher electricity bills.
Fiscal consolidation is expected to continue in 2024 and 2025, as the general government deficit is set to decrease to 2.4% of GDP in 2024, mainly due to temporary tax increases aimed at financing the post-flood reconstruction.
In 2025, the deficit is projected to narrow to 2.1% of GDP on the back of a new long-term care contribution, to be levied from July 2025, and higher CO2 emission revenue. In 2026, it is forecast to remain at 2.1% of GDP.
The debt-to-GDP ratio is forecast to decrease gradually from 68.4% in 2023 to 63.1% in 2026.
