LJUBLJANA, June 9 (Xinhua) -- Slovenia's gross domestic product (GDP) growth will reach 1.3 percent, down from 2.2 percent forecast in December, the Bank of Slovenia said in a report on Monday.
It also cut GDP growth forecast for 2026 to 2.4 percent from 2.8 percent it had forecast earlier.
"Economic activity in Slovenia shrank by 0.8 percent in the first quarter, mainly due to much higher uncertainty in world trade," the bank said, adding that the fall in the first quarter will reduce annual growth, although GDP is expected to rise in the coming quarters.
"Economic activity will gradually strengthen due to domestic factors as well as gradual improvement of the international environment," it said.
It said household spending will rise in 2026 and 2027 amid high growth of wages and low unemployment, while state and private investment will also increase.
Annual inflation is expected to rise to 2.5 percent this year, up from 2 percent in 2024, mainly due to higher prices of food and higher labour costs after Slovenia in January increased all public sector wages.
"Amid a gradual slowdown of wage increases and a productivity increase, inflation should ease in 2026 and 2027," it said, forecasting annual inflation of 2.2 and 1.9 percent in those years.
It said, however, GDP growth this year could be 0.4 percentage point below forecast in case that the United States would further raise duties on goods from Europe and China, which would lead to retaliatory measures and continuation of global uncertainty regarding economic policies.
It added that possible higher than expected investments in defence and infrastructure would raise economic growth above the forecasted value but would also increase inflation. ■
