Report: Slovenia Will Not Reach EU GDP Before 2025
A leading Slovenian economic institute has concluded that Slovenia is unlikely to catch up to the average GDP per person in the European Union before the year 2025. This is 12 years later than predicted in the current national development strategy.
At the moment, Slovenia's GDP amounts to around 76 percent of the EU average, which means that the country's economy would have to grow annually by 4.9 percent between 2002 and 2013 if it is to catch up to the average EU GDP by 2013.
However, the Institute for Macroeconomic Analysis and Development (IMAD) predicts that economic growth in Slovenia until 2013 is to amount to around 3.6 percent annually. This means that Slovenia will need at least 12 additional years to catch up to the average GDP in the EU.
According to IMAD's Economic Mirror publication, Slovenia's economy grew at an average pace of 4.1 percent annually between 1993 and 2002. Contributing most to growth was a rise in physical capital, whereas human capital contributed little.
Human capital is expected to continue to make only a minor contribution to GDP growth until 2013, IMAD believes, while the effect of the rise in physical capital is expected to fall in this period.
The study also points out that differences between the trends in human and physical capital in Slovenia and the rest of the EU are not such as to warrant a 24 percent developmental gap. The main reason for the difference lies in technological progress, IMAD says.
The study concludes that Slovenia still lags behind the EU average in terms of spending on new technology, both as concerns research as well as foreign direct investment.
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