The Slovenia Times

Slovenia's economy contracts in third quarter


Slovenia's gross domestic product contracted by 1.4% in the third quarter of this year compared to the previous quarter. Growth slowed to a seasonally adjusted 3.9% at the annual level from 7.9% in the previous quarter, Statistics Office data show.

Domestic expenditure increased by 2.7% compared to almost 11% in the previous quarter, and growth in gross capital formation more than halved to 6.7%.

Growth in value added halved as well, to 4.1%, as activity slowed down across the majority of industries and declines were recorded in sectors including agriculture, real estate, education, health, and social work.

The only sector that accelerated was construction, where annual growth was 10.4% compared to 7.7% in the previous quarter.

On the upside, after five consecutive quarters of imports outpacing exports, the trend reversed. The surplus of exports over imports contributed 0.8 percentage points to GDP growth.

Employment trends also proceeded apace as total employment, which hit 1,082,000 persons, increased by 2.0% year-on-year. Most new jobs were created in construction, manufacturing, and professional, scientific and technical activities.

IMAD, the government's macroeconomic forecaster, described the slowdown as expected and within range of its latest forecast but noted economic activity would soften further in the final quarter.

"However, [the slowdown] could be slightly less pronounced than predicted in our autumn forecast, including because of the measures to contain energy costs adopted at the national and EU level," IMAD director Maja Bednaš said.

The central bank meanwhile commented that the 1.4% quarterly contraction was significantly worse than in the eurozone, which achieved weak growth in this period. It expects moderate year-on-year growth to continue in the final quarter.


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