LJUBLJANA, Dec. 18 (Xinhua) -- The Bank of Slovenia on Wednesday cut this year's growth forecast for the country's economy from 2.5 percent predicted in June to 1.4 percent, citing a low level of investment in construction and lower exports than expected.
"Economic growth in the first three quarters of 2024 was modest, initiated mainly by state and household spending," the bank said in a report, adding that 2024 growth is expected to be the lowest since 2020. Last year Slovenia's economy expanded by 2.1 percent.
The Slovenian car industry, which comprises around 400 companies and accounts for some 10 percent of the country's gross domestic product (GDP), has over the past year been reporting that foreign demand for its products is decreasing.
Slovenia's central bank has forecast 2.2 percent growth for 2025, down from the 2.6 percent it forecast earlier. Meanwhile, it has forecast 2.8 percent growth in 2026.
The bank expects higher export demand from 2025 to 2027 due to an expected recovery among the main trading partners, which will in turn result in an increase in private sector investment.
It forecast annual inflation at 2 percent in 2024 and 2.2 percent in 2025, down from 7.2 percent last year.
The significant fall in the inflation rate this year was due in part to lower energy prices. The government has been capping household energy prices since 2022, and last month decided to prolong the cap until the end of February in order to ease the financial burden on households.
The bank said that growth could be lower than currently expected, due to geopolitical tensions.
Slovenia is an export-oriented country whose main trading partners include other European Union states. Its primary exports are cars, car parts, pharmaceutical products and household appliances.
