The Slovenia Times

Slovenia's GDP growth slows marginally to 2.3% in Q3


The growth rate is the slowest since the third quarter of 2016 and compares to 2.5% in the second quarter and 3.3% in the first quarter of the year; in the first nine months the economy expanded by 2.7% year-on-year.

Domestic spending rose by 3.8% in the third quarter, almost double the rate of the previous quarter, while investments surged by 4.4%, having been in negative territory in the previous quarter.

However, the increase in investments is mostly the result of inventory changes, as gross fixed capital formation, a key benchmark, rose by just 1.2% compared to 6.9% in the previous quarter.

Export growth slowed to 4.5% from 5%, but with imports growing at a far faster pace, at 6.7%, the external trade balance contributed a negative 1.2 percentage points to growth.

Overall employment continues to increase, with the total number of workers rising by 2.3% year-on-year, mostly on account of robust employment in the manufacturing sector and construction.

Banka Slovenije, the central bank, provided a bullish commentary on the figures, noting that the situation in Slovenia was still more favourable than in the eurozone as a whole.

The latest trends suggest that the trajectory will remain similar through the end of the year, as international figures show external demand stabilising and services revenue projected to remain solid.

IMAD, the government forecaster, similarly said that industry trends suggest a continuation of fast growth in the services sector, underpinned by strong employment trends and disposable household income.

"The trends in the first three quarters do not currently indicate a significant divergence of GDP growth from the autumn forecast. Yet uncertainty in the international environment remains high and in the event the risks materialise this could lead to faster deceleration," IMAD director Maja Bednaš said in a press release.

IMAD projects that the Slovenian economy will expand by 2.8% this year.

The Chamber of Commerce and Industry (GZS), which is typically bearish in its outlook on the economy, noted that the growth rate was "outside our interval of expectations" and indicated "a substantial slowdown" of growth.

The GZS for now maintains its forecast that the economy will grow by 2.9% for the whole year but believes that downside risks that the growth rate will not be achieved "has significantly increased".


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