The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with the Republic of Slovenia on Wednesday, January 11, 2023, and endorsed the staff appraisal without a meeting.
Slovenia recovered quickly from the pandemic, with GDP increasing by more than 8% in 2021, primarily driven by exports and private consumption. Strong economic performance has continued into 2022, but growth slowed significantly in the third quarter as spillovers from the war in Ukraine and rising prices weighed on economic activity. The labour market is tight, with unemployment at a historic low, but wage growth remains lower than inflation.
Growth is expected to slow further to 1.8% in 2023 from 5.4% in 2022, reflecting weaker external demand and subdued private consumption and investment, partly offset by an expected accommodative fiscal policy stance. Inflation is expected to decline but will likely remain elevated for some time before returning to target. The economic outlook is highly uncertain, and risks, mainly from war-related spillovers, are mainly on the downside. Over the medium term, growth is projected to rebound to its potential of around 3%, underpinned by investments and reforms, including those supported by EU funds.
Source: International Monetary Fund. The complete article is available HERE.