GDP will strengthen in Slovenia this year for 2,1 percent, OECD says. Economic growth forecast for 2016 remains at 1,9 percent. Unemployment rate based on these assumptions is supposed to fall from current 9,4 percent to 9,1 percent next year.
After The Organization for Economic Cooperation and Development (OECD) increased its economic growth forecast for Slovenia in May already they increased the projections even more. Last month’s forecast was 1,8 percent but current June’s forecast for this year’s GDP is 2,1 percent, says June’s forecast publication.
Organization based in Paris explains that the main drivers of economic growth will be strong exports and public investments in infrastructure projects that are also partly financed by EU. 2016 forecast remains the same at 1,9 percent.
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Unemployment rate will drop
OECD increased its forecast to the Euro area as well but decreased it for the World economic growth. Global economic growth should stay around 3,1 percent this year which is 0,5 basis point less than the November 2014 forecast.
The unemployment rate in Slovenia should based on these forecasts drop from 9,4 percent this year to 9,1 percent next year, while the public finance deficit should drop from 2,9 percent GDP to 2,5 percent GDP. Consumer prices will drop for 0,4 percent on average this year but increase for 0,7 percent next year, OECD forecast says.
Decreased consumer spending
Fiscal consolidation, high unemployment rate and deleveraging of business debt will affect countries consumer spending, estimates OECD. Economic growth will be slowed down in 2016 by decreased public investments, although private investments and consumer spending should gain some momentum.
The main assignment for Slovenia is smooth and fast restructuring of companies with decreasing the size of bad loans in banks, highlights OECD. Consistent structural reforms are needed especially by lowering regulatory limits and improving government processes.
Economic growth could get stronger in Slovenia by strengthening active politics on the labour market, OECD says, while privatization and bigger openness to foreign investments could bring new capital and improved company management.