Driven by investment and household consumption, Slovenia's economy expanded by 1.6% last year, which compares to 2.5% in 2022, but the rate picked up to 2.2% in the final quarter, preliminary data from the Statistics Office (SURS) shows.

The rate of growth adjusted for season and working days, a gauge used by the EU's statistical office, Eurostat, was higher, at 1.9%.

In the fourth quarter of 2023 growth picked up, with the country's GDP increasing at an annual rate of 2.2%, or 2.6% when adjusted for season and working days, SURS official Martin Bajželj told reporters on 14 February.

Last year gross fixed capital formation grew by 9.5% and household expenditure by 1.3%.

Meanwhile, changes in inventories had a negative impact on GDP growth of 4.4 points.

Exports decreased by 2% and imports by 5.1%, with surplus in foreign trade balance contributing 2.8 points to GDP growth.

The 1.6% growth figure is fully in line with the projection by Slovenia's Institute of Macroeconomic Analysis (IMAD), the government's macroeconomic forecaster.

IMAD attributed the drop in exports to persisting uncertainties in the international environment, slow growth in Slovenia's main trading partners and Slovenian exporters being less competitive due to higher prices.

A robust growth in capital formation was fuelled by investment in construction projects, including post-flood reconstruction.

The 2023 preliminary annual growth figures are based on quarterly data, while a more accurate figure will be released at the end of August. Last year the preliminary estimate saw a substantial downgrade.

In the fourth quarter of 2023, imports decreased by 4% and exports by 2.3%, with foreign trade balance contributing 1.5 points to the GDP figure.

Domestic expenditure rose by 0.7%, final consumption expenditure by 2.2%, while fixed capital formation contracted by 4.2%, mostly due to a drop in inventories.

Gross fixed capital formation was up by 9.1%, mostly due to an increase in investment into buildings and structures. Household consumption expenditure went up 1.2%.

Commenting on the fourth quarter figures, IMAD director Maja Bendaš said "we are entering 2024 with a bit more optimism than last year, but uncertainties remain".