Erste expects Slovenia's inflation to slow down in 2023

LJUBLJANA (Slovenia), December 7 (SeeNews) - Erste Group expects Slovenia's annual inflation to remain around 10% in December, before gradually slowing down next year, it said.

"Looking ahead, inflation is expected to remain around 10% mark by the year-end, followed by gradual easing towards the lower levels in 2023, provided that the energy pressures stabilise," Erste said in a report last week.

The slight reduction of the consumer price index (CPI) to 9.9% in October from 10.0% in September was chiefly due to the decision of the government to introduce a regulation on energy prices on September 1, Erste said.

Slovenia's consumer prices grew by 10.0% year-on-year in November, the country's statistical office said last week.

"Looking into 2023, domestic demand is seen further losing its momentum, as persistent inflation and strong base effect would negatively impact private consumption profile, while investments activity should also decelerate, although remaining supported by the EU funds," Erste said.

Last month, Erste said it expects Slovenia's economic growth to slow down to about 1% in 2023 from 5.4% this year, as private consumption will lose momentum. Domestic demand should remain supportive, but will mainly come from steady investment activity, while private consumption would further lose momentum amid persistent inflation and a strong base effect, Erste Group said back then.