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Economic growth, which moderated in 2018, is projected to slow significantly in 2019 and 2020, as capacity limits become an increasing constraint on output and as investment growth eases towards more sustainable levels. Export-market gains will decelerate as higher wages take their toll on the competitiveness of exporters.
The fiscal policy stance is projected to remain expansionary in 2019 and turn neutral in 2020. The budget surplus, after widening to 0.6% of GDP in 2018, will narrow in 2019 as a result of the discretionary easing and slower economic growth. However, as monetary conditions in the euro area will remain accommodative, a larger surplus is needed to contain inflationary pressures and to ensure continued debt reduction.
1. Percentage of manufacturing firms pointing to labour shortages as a factor limiting production.
Source: Eurostat Industry database; Statistical Office of the Republic of Slovenia.
Economic Survey of Slovenia (survey page)