Ljubljana, 14 March (STA) - The government's economic think-tank, IMAD, upgraded Friday its forecast for the Slovenian economy for this year to 0.5% growth from a contraction of 0.8% envisaged in its previous forecast.
In its autumn forecast, the Institute for Macroeconomic Analysis and Development did not anticipate Slovenia return to year-round growth until 2015, but the latest, spring forecast pushed that forward to this year.
The upgrade comes hot on the heels of data from the Statistics Office which found that the Slovenian economy saw annual growth of 2.1% in the final quarter of 2013.
IMAD head Boštjan Vasle said the improvement noted in the most recent figures was better than anticipated.
Exports are expected to contribute most to the expansion of the economy in 2014, while IMAD anticipates domestic consumption to continue shrinking, albeit at a slower pace.
Vasle highlighted that Slovenia's economic competitiveness has improved of late, which has enabled quicker growth in exports.
Domestic consumption is still limited by the prevailing trends at home, he said, adding that the employment picture is not expected to improve this year.
IMAD expects the economy to keep expanding in 2015, when the growth rate will edge up slightly to 0.7%, before nearly doubling to 1.3% in 2016.
Vasle stressed that for the growth rate to pick up, an improvement will be needed in crediting of local business, which remains subject to a credit crunch.
Also, Vasle said that the government will have to persist with fiscal consolidation, warning that problems with the real estate tax could force the government to take additional measures whose impact on growth could be adverse.
The new outlook was debated by the government at today's session.