Ljubljana, 19 December (STA) - Slovenia's central bank has somewhat downgraded its economic outlook for the country, projecting GDP to expand by 4.2% this year, then slow down to 3.4% in 2019 before stabilising at 3% in 2020 and 2.9% in 2021.
The growth rates in the latest forecast are being revised by 0.4 percentage points on Banka Slovenije's July outlook and are more pessimistic than those of the government forecaster IMAD and most international institutions.
Commenting on the latest outlook in Ljubljana on Wednesday, acting governor Primož Dolenc said that Slovenia would continue to enjoy a favourable growth rate although a somewhat slower-paced one.
The slowdown is due to a shift to a more moderate phase of growth in Slovenia and its main trading partners.
However, growth will continue to be broad-based, supported by domestic consumption and private investment as well as by external demand and export activity.
The main risks to GDP are geopolitical ones such as the developments in Italy and France or those related to Brexit, and a potential step-up in protectionist measures.
Inflation risks are related to rising labour costs in light of the expected continued decline in unemployment and pressures on wages, and trends in prices of raw materials.
Considering Slovenia's growth will outpace the eurozone average, inflation will somewhat exceed the European Central Bank's mid-term goal. It is projected to hit 2% this year, before increasing to 2.2% and 2.3% 2020.