The Organization for Economic Co-operation and Development (OECD) has slightly improved its forecast for Slovenia’s GDP in 2020, forecasting that it will decline by 7.5% this year, while lowering the expected rebound in 2020 to 3, 4%.
In the first half of June, the OECD saw the Slovenian economy contract by 7.8% this year, before reaching a growth rate of 4.5% in 2021.
In its latest report published on Tuesday, the Organization notes that the effects of the Covid-19 pandemic would continue to disrupt economic activity at least until mid-2021.
“By the end of the projection horizon in 2022, investments and exports will be the main drivers of growth due to higher demand in trading partner countries due to the improving epidemiological situation “, adds the report.
The OECD notes that economic activity in Slovenia picked up in the third quarter of 2020, after the lockdown ended in mid-May. However, the new restrictions introduced in the fall affect fiscal activity, especially in the service sectors.
âEconomic activity is expected to slow again as the virus spreads. Demand is expected to rebound in 2021, before falling back on a more stable path, âthe report notes, adding that public spending and household consumption will maintain the recovery until the end of 2021.
Export-oriented sectors are expected to benefit from stronger demand from the EU from 2021, but the outlook looks very uncertain as a further significant deterioration in the public health situation could lead to prolonged restrictions that would slow down economic recovery.
The OECD also notes that unemployment is increasing, calling for strengthened active labor market policies targeted at specific groups, such as the long-term unemployed and the older unemployed.
“Government support to households and businesses most affected by the crisis, in the tourism and entertainment sectors in particular, is expected to continue.”
The Paris-based organization also released a forecast for 2022 for the first time, expecting a 3.5% improvement from 2021. /ibna