Slovenia - Economic forecast summary (June 2016)


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Economic growth is projected to slow in 2016 owing to sluggish global trade and temporarily weaker public investment as EU-financed projects slow down. Growth will pick up in 2017 as a strengthening labour market boosts private consumption, and improved financial conditions and stronger balance sheets of companies enhance private investment. Inflation will remain low due to remaining slack in the economy. Unemployment will fall over the projection period.

Continued corporate, and especially SME, restructuring and a reduction of non-performing loans remain priorities to revive credit flows. Continued fiscal effort is needed to tackle the still rising public debt, while the incomes of the poorest need to be protected. Structural reforms to pensions, education and health care could boost growth and bring savings without jeopardising service quality.

Productivity could be boosted by lowering regulatory burdens and implementing the privatisation programme. These reforms would also help stimulate more foreign direct investment, improve corporate governance, attract new technologies and raise innovative activity. Lowering the high tax wedge on labour income could boost employment, especially of the high-skilled.

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