7

The contraction in the last quarter followed a 0.5% reduction in economic activity, in real terms, in the third quarter of 2011. A recession is defined as two consecutive quarters of negative growth. "The rather pronounced fall in economic activity was the product of two factors", the public was informed by Karmen Hren, who is responsible for the national accounts at the Statistics Office; she pointed to external and domestic demand. External demand continued to have a positive impact on economic growth but the growth in exports slowed to 3.0% year on year in Q4, significantly lower than the growth rates in the second half of 2010 and first half of 2011. "We recorded growth rates above 10% in some of the quarters in that period," Hren recalled, but given the situation in other EU countries she said the impact on the Slovenian economy was not surprising.
Commenting on the figures, the Institute of Macroeconomc Analysis and Development (IMAD), said that the fall in final domestic consumption, coupled with the slowdown in export growth, increase the risks to growth this year. The government think-tank noted that the 2.6% fall in government consumption was a result of fiscal austerity and the freeze on budget expenditure in the final months of last year. "The deterioration in the international environment, the higher then expected contraction in domestic economic activity at the end of last year and the announced fiscal consolidation increase the risk that the economy will contract further this year," IMAD boss Boštjan Vasle noted.
Meanwhile, the Chamber of Commerce and Industry (GZS) highlighted the significant fall in construction investment which last year hit a 10-year low. It called for measures to restart investment in the sector and urged companies to seek contracts outside the EU as export remains the main motor of growth.
The Dean of the Ljubljana Faculty of Economics, Dušan Mramor, says that his projection of a double-dip recession is now becoming a reality, a development shown by models relevant to the structure of the Slovenian economy with the bulk of companies supplying final producers. Future trends will depend on economic policies.

GDP Growth in 2011 (quarterly)

	Current prices, EUR m1	Real growth in %, Q /Q-4	Real growthin %, Q/Q-1(seas.)
Q4, 2011	8.870	-2,8	-0,7
Q3, 2011	9.183	-0,5	-0,4
Q2, 2011	9.223	0,7	-0,1
Q1, 2011	8.362	2,1	-0,3