In the fall forecast, the European Commission has slightly lowered the estimate of Slovenian GDP growth. This year, Brussels expects 4.3% growth in the Slovenian economy, which is 0.1% lower than the provisional estimate for July. For the coming year, estimates fell 0.2 from the percentage point to 3.3 percent.
For the first time, the Commission also issued estimates for 2020, when expecting a 3% increase in economic activity.
The medium economic forecast published in July has slightly lowered the initial economic growth forecast for Slovenia. Estimated July economic growth of 4.4% is 0.3 percentage points lower than the estimated spring. For the coming year, the commission then fell 0.1 percentage points to 3.5 percent.
Estimates are lower than estimates of Slovenian institutions
Estimates of the European Commission are now slightly lower than the estimates of central Slovenian institutions. In September, the Office of Macroeconomic Analysis and Development announced 4.4% GDP growth and a 3.7% increase in economic activity for the following year. In July, the Bank of Slovenia estimated 4.6% economic growth for Slovenia this year and 3.9% for the following year.
The OECD forecast for Slovenian GDP growth for this year increased to 5%
The European Commission noted that economic growth in Slovenia after 4.9% GDP growth last year remained high and reached 4.6%. This was mainly due to the influence of favorable external trade and investment growth, while growth in private consumption was somewhat slower.
Export growth is expected to slow down
But due to the loss of economic momentum in Slovenia's most important foreign trade partners in the euro area, growth in the second half of this year, according to European Commission estimates, slowed, as evidenced by the slightly lower level of the economic atmosphere in the country. The Statistics Office will publish data on economic growth in the third quarter later this month.
Brussels remains at 2.1% for the euro area and the European Union
The European economy is subsiding. The euro area and EU GDP will continue to grow, but at a moderate and future level, there is a lot of uncertainty and risk, the European Commission noted in the fall economic forecast. For this year, however, regions with the euro and Eighteen will remain at a growth rate of 2.1%, and growth in the next year is 1.9%.
This decline also reflects Brussels forecasts. Lower estimates will mature in particular for the adverse effects of foreign trade, as export growth is expected to moderate to 8.1 percent this year, next year to 6.2 percent, and by 2020 to 4.2 percent. Import growth is expected to reach 8% this year, next year at 6.9% and in 2020 by 5.2%.
Private consumption growth will, according to expectations, Brussels, while favorable conditions in the labor market and salary increases, will increase from 2.2 percent this year to 2.9 percent next year, and in 2020 to 3.1 percent. The country's consumption growth, on the other hand, is expected to decline to 1.4 percent this year from 2.7 percent in 2020.
State and company investment will continue to grow
State and company investment is expected to continue to grow, but growth is also expected to slow down a little. According to last year 10.7 percent is expected to reach nine percent this year, next year 7.5 percent and in 2020 7.4 percent. In this case, investment growth in company equipment is expected to be rather moderate, while government investment needs to be strengthened while accelerating the absorption of EU funds. Investment in housing construction must remain high.
Umar corrects the forecast: economic growth will be lower
The European Commission sees risks for economic growth, especially in the external environment, where trade, geopolitical and political risks accumulate. If export growth slows more than forecast, this could have a greater impact on the economic mood and tendency to invest in companies. On the other hand, in Brussels, they found that, on average, a healthy financial situation continued to allow Slovenian households to increase their consumption.
Unemployment is estimated to fall to 5.1 percent
Employment is expected to continue to grow, although growth from this year is three percent expected to slow to 1.7 percent in 2020. The unemployment rate of the survey is projected to decline to 5.1 percent this year from 5.6 percent, while wage growth is expected to reach a little more than three percent over a three-year period.
Although growth is relatively high, inflation is expected to remain limited, and this year two percent will strengthen to 2.2 percent by 2020.
In the forecast, the European Commission also touched on the fiscal area. As such, he built his forecast on the assumption that the policy would not change, because the Slovenian government would only set a budget for rebalance for 2019 and determine new fiscal measures only at the beginning of next year.
GDP in the second quarter grew 3.8 percent
Even with policies not changing, the state is expected to register a minimum general government surplus over a three-year period, due to favorable economic trends and far lower costs of paying public debt, which, because expenditure growth is faster than income of 0.5 percent this year of GDP in 2020, it will fall to 0, 2 percent.
However, in Brussels again, they showed a deterioration in the structural position of public finance because of pressure on the side of public finance. As such, they found that the realization of the promise of a coalition agreement could lead to a greater increase in spending. The structural deficit is projected to rise to 0.8 percent from last year's 0.4 percent of GDP potential this year, reaching one percent in the next two years.
Public debt is expected to approach 60 percent of GDP at the time of repayment of debt and income from sales of NLB and Abanka in 2020. This year is expected to reach 70.2 percent of GDP, and in 2020 it stops at 62.6 percent of GDP.
Economic growth has slowed, but remains higher than in the euro area