The Slovenia Times

IMAD expects GDP growth for 2019 around the projected 2.8%


In the latest issue of The Economic Mirror publication, IMAD says that the year-on-year growth of Slovenia's GDP in the first nine months of 2019 was 2.7%, which is a significant slowdown compared to 2018, while close to its autumn projection for the whole year (2.8%).

Statistics on GDP in the third quarter of the year show a faster slowdown of investments than expected by IMAD. On the other hand, the growth of exports has slowed down in line with expectations, and the growth of private consumption is encouraging.

According to the report, the slowdown of economic growth in Slovenia's main trade partners is related to the considerable slowdown of growth of Slovenia's exports in the intermediate goods segment, in addition to the declining exports in the automotive segment.

On the other hand, economic activity in a majority of services continues to intensify in the third quarter, while the construction activity declined after a favourable start of the year. Revenue in commerce and a majority of commercial services increased.

When it comes to construction, the decline of activity was the highest in non-residential buildings, which IMAD believes is connected with the deteriorating sentiment in the business sector and its weak investment activity.

With disposable income further increasing, consumption by households is also increasing, the report says, adding that the situation on the labour market also remains favourable, with the number of the active population reaching records.

The growth of wages in the first three quarters, mostly owing to a high growth in the public sector, exceeded the growth from a year ago. In addition to a higher growth of social transfers, this growth was also enhanced by higher consumption by households in the third quarter.

The growth in the purchase of durable goods slowed down this year, which IMAD attributes to consumers being increasingly pessimistic lately regarding the prospects for the economy, which is, among other things, reflected in further growth in savings.

The budget surplus in the first ten months of the year was higher than in the same period in 2018, but the growth of revenue lags behind the growth of expenditure this year. This is a mainly a consequence of a lower tax revenue and poor drawing of EU funds, according to IMAD.


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