The Slovenia Times

Slovenia's economy expanded by 5.4% in 2022


Slovenia's economy expanded by 5.4% last year, but by the last quarter of the year GDP growth slowed down to an annual rate of 0.2%, estimates released by the Statistics Office show. National and international institutions expect the country's economic growth to slow to between 0.5% and 1.8% this year.

Seasonally adjusted GDP, a gauge used in EU-wide comparisons, increased by 5.7% in 2022. In the final quarter of the year, it rose by 1.3% year-on-year and by 0.8% on the previous quarter. Quarter-on-quarter, GDP contracted only in the third quarter last year, by 1.3%.

According to first estimates released by Eurostat in late January, Slovenia's growth last year outstripped that of the eurozone (3.5%) and the whole of the EU (3.6%). In the final quarter of the year eurozone recorded a 0.1% quarter-on-quarter growth and a 1.9% growth year-on-year.

Figures released by Slovenia's Statistics Office on 14 February show last year's growth was driven by final consumption expenditure and gross capital formation, while external trade had a negative impact because imports grew at a faster rate than exports.

The external trade surplus amounted to €961 million in 2022, which compares to €3.310 billion the year before.

Growth slowed in the second half of the year. According to fresh data, GDP surged at an annual rate of 10.2% in real terms in the first quarter before growth eased to 8.6% in the second quarter and then slowed to 3.3% in the third quarter and further still to 0.2% in the fourth quarter.

In the final quarter, domestic expenditure increased by 1.2% year-on-year; household consumption expenditure rose by 2.6% and gross fixed capital formation increased by 5.9%.

In that quarter, both exports and imports contracted year-on-year in what was the first decrease since the final quarter of 2020. Exports decreased by 2.5% and imports by 1.5%. The contribution of external trade balance to GDP growth was negative, at 0.9 of a percentage point.

Total value added increased by 1.4% compared to the fourth quarter of 2021 where joint activities of mining and quarrying, manufacturing, electricity and water supply recorded the first decrease in two years, at an annual rate of 6.3%, the most of all activities.

Employment kept increasing in the final quarter of the year, but at a slower pace. Year-on-year it increased by 1.6% to 1,083,800 people. Construction and manufacturing industries created most new jobs.

The 2022 growth figures were released just a day after the European Commission upgraded its growth projection for Slovenia in its winter forecast. It now expects Slovenia's economy to grow by 1% this year and by 2% in 2024, up by 0.2 and 0.3 percentage points, respectively, from its autumn forecast.

The Commission expects continued global economic uncertainty and the tightening of financial conditions to limit growth at the beginning of this year. However, as employment remains high and wage growth is set to be robust, growth is projected to improve starting from the second half of the year.

While private consumption is expected to grow only modestly after its fast increase in 2022, investment is forecast to continue increasing, supported in particular by public investment. The Commission expects export growth to accelerate, but also that imports will remain strong.

The Commission expects Slovenia's inflation to slow to 6.1% this year, an improvement from 6.5% projected in the autumn.


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