Slovenia’s economy is set to expand by 1.8 percent this year, the government’s macroeconomic institute UMAR said on Thursday, improving its September forecast of 1.4 percent.
However, gross domestic product (GDP) growth will still be significantly lower than last year, when it reached 5.4 percent, mainly due to a slowdown in the growth of exports, investments and household spending amid an ongoing global energy crisis and relatively high inflation.
UMAR said that inflation is expected to gradually slow down, but may not settle around 2 percent until after 2024. After hitting an average of 8.8 percent last year, it should drop to 7.1 percent this year, and to 4.2 percent in 2024.
The current high prices of services and food will continue to contribute significantly to inflation, UMAR said.
“Signals from the international environment show that uncertainty regarding energy supply and energy prices has been reduced significantly, so economic expectations are improving,” the institute said in a report.
It forecast export growth of 2.7 percent for this year, and 4.1 percent next year, after exports rose by 6.5 percent in 2022.
Slovenia exports more than 70 percent of its production, mainly to other European countries. Its main exports include cars, car parts, pharmaceuticals and household appliances. ■