Brussels reduces the forecast of growth to Europe, including Slovenia
The European Commission has reduced the forecast of economic growth for the EU and the euro area, including Slovenia. Half a year ago, Slovenia predicted 2.5 % growth for this year and 2.6 % for the coming year. The announcement of our country announced today for this year’s announcement forecasts two percent of growth and 2.4 percent for next year.
Growth in Slovenia will remain above average, which will be 0.9 percent for the euro area this year and 1.4 percent next year. In the fall, the European Commission envisaged another 1.3 and 1.6 percent. Malta, Ireland, Croatia, Cyprus, Lithuania and Spain will have the highest growth this year, with Poland and Denmark outside the euro area. At the bottom of the scale, Austria is minus 0.3 percent and Germany with zero growth. The largest European economy is expected to strengthen to 1.1 percent next year.
According to the European Commission, growth in Slovenia will promote domestic demand and export. Last year, they found a reduction in construction and a fall in investment in machinery and equipment. Employment growth is also moderate compared to previous years. Real salaries increased by 4.2 percent.
Higher employment and salaries are expected to encourage domestic consumption. Public investments are also expected to remain high, thanks to projects under the flood recovery plan and rehabilitation. Similar movements are expected for next year: growth is expected to promote domestic demand, and investments are expected to strengthen.
Moderate EU growth in the middle of uncertainty
The European Commission estimates that positive movements have continued in the EU in the first quarter of this year, as preliminary data indicate GDP growth of 0.3 percent. Despite greater global uncertainty and trade tensions, growth is expected to strengthen next year.
« EU economy has shown resistance to high trade tensions and increasing uncertainty in the world, » said European Commissioner for Economy Valdis Dombrovskis. With the support of the solid labor market and increasing salaries, growth is expected to continue in 2025. Inflation may also reach a target of two percent this year. According to Dombrovskis, the EU must take decisive steps to increase competitiveness.
What will be the effect of defense investments?
With regard to defense investments, European Commission Analysts estimate that a greater proportion of expenditure on research and development and investment in infrastructure could create more positive effects on GDP in the long run. More imports in the area of defense would, however, reduce the general economic impetus.
