The European Commission has kept Slovenia's economic forecast unchanged at 2.7% for 2020 and 2021, more than double the eurozone average. In its winter 2020 forecast released on Thursday, it said consumption and investment are expected to continue growing while net exports are set to "weigh on growth over the forecast horizon".
Net exports are expected to have a positive impact, but their contribution to headline growth will be slightly lower due to lower export demand growth and robust import growth.
Private consumption is expected to remain strong in the next two years provided the employment rate remains high and wages keep on rising.
Investment growth is also forecast to continue apace, albeit at a slightly lower rate than in 2019 due to weaker economic confidence.
The Commission has also said that housing investment is expected to start growing due to recent increases in house prices. Moreover, commercial real estate and public investments are projected to continue increasing as well.
Meanwhile, higher wages will drive up inflation, in particular in the services segment. "Overall, consumer price inflation is forecast at 1.9% in 2020 and 2% in 2021", up from 1.7% in the second half of 2019.