Quarterly real GDP growth stood at 0.1%, which is on par with the previous quarter, when annual growth had been at 2.1%.

The slowdown in annual growth mirrors that seen elsewhere in the eurozone, which has seen the recovery run out of steam in the past three months, Karmen Hren of the Statistics Office told the press.

The Institute of Macroeconomic Analysis and Development (IMAD) said the data showed that exports were the key engine of growth, while the slumping construction sector continued to be a major drag.

Slovenia's growth trails the average of the eurozone, which saw economic expansion of 1.7% in the second quarter.

The slowdown in annual growth comes as domestic spending and gross capital formation returned to negative territory after two positive quarters.

Domestic spending was down 2.1% over the second quarter in 2010, while gross capital formation contracted by 9.2% due to the ongoing slump in construction, which shrank by as much 24%.

The contraction in construction in the previous quarter was the biggest in two-and-a-half years and means the value generated by the sector is now at 1996 levels or down by as much as 47% from its heyday in the third quarter of 2008.

Trade continued to provide some momentum for the Slovenian economy, although it also slowed, expanding by 8.3% year-on-year, which is 2.8 points less than in the first quarter.

Meanwhile, the growth in imports fell significantly, from 9.6% in the first quarter to 3.9% in the second quarter.

The Statistics Office said that growth for the first six months of the year compared to the same period last year stood at 1.6%.

This lags behind IMAD's forecast for annual growth for this year of 2.2%.

The institute warned today that domestic consumption is still failing to show signs of recovery as a result of the troubles in construction and the difficult conditions on the labour market.

The institute, which acts as the government's main economic think-tank, also highlighted that there had yet to be an improvement in financing of business in Slovenia, a key condition for bolstering growth.

The Statistics Office also released updated GDP figures for the previous four years today, as part of which growth for 2010 was revised upwards from 1.2% to 1.4%.