The Slovenia Times

Slovenia's economic growth slows to 1.1% in third quarter

An assembly line at caravan maker Adria Mobil in Novo Mesto. Photo: Tina Kosec/STA

Slovenia's economy expanded at an annual rate of 1.1% in real terms in the third quarter of the year, a slowdown compared to the previous quarter. Year-on-year growth in the first nine months was 1.3%, the national Statistics Office reported on 14 November.

According to seasonally adjusted data, the country's GDP in the third quarter increased by 1.6% year-on-year but decreased by 0.2% on the quarter before.

Apart from a slowdown detected earlier already, the Statistics Office said that in the third quarter the Slovenian economy also suffered a shock as a result of the August floods, which affected businesses in parts of the country.

Similar to the previous quarter, statisticians observed a decrease in foreign trade in the period between July and the end of September, but the year-on-year decline was much more pronounced.

Imports dropped by 12.1% and exports fell by 9.2% year-on-year. Slovenia still had a trade surplus at current prices of €1.145 billion, which contributed 2.4 percentage points to GDP growth.

Domestic expenditure decreased by 1.4%, that is at a much slower rate than in the previous two quarters, when it fell by about 3%.

Final consumption expenditure rose by 0.2% mainly due to a 2.8% increase in government spending, while household consumption declined by 0.8% in what is the worst result since the third quarter of 2022.

Gross investments decreased by 6.1% year-on-year, which is also a significantly lower rate of decline than in the previous two quarters. In the first quarter, they had fallen by 16.9% and in the second by 15%.

The Statistics Office said a reduction in inventories again contributed to the decline significantly, cutting GDP growth by 3.2 percentage points. In the first two quarters, this negative effect had been at around six percentage points.

Meanwhile, gross investments in fixed assets were up by 8.3%, which is in line with this year's favourable trend in this area. The main contributor were investments in construction.

According to revised data, the GDP growth rate in the second quarter was 1.6%, up 0.2 percentage points on the original estimate. The seasonally adjusted estimate was raised to 1.7% from 1.6%. On a quarterly basis, GDP rose by 1% in the second quarter.

GDP growth in the third quarter was still slightly higher than in the first three months of this year and at the end of 2022.

Commenting on the latest figures, both the central bank and the government's macroeconomic forecaster IMAD said the economy was slowing down in line with projections. They also pointed to uncertainty related to external demand, especially in Slovenia's major trading partner Germany.


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