The January-March period marked the biggest contraction so far during the current period of four consecutive negative quarters for the Slovenian economy.

While exports remained the only source of expansion, growing by 1.8% year-on-year, its effects were significantly outweighed by a 7.7% drop in domestic consumption and a 20.7% reduction in gross capital formation.

Private consumption contracted by 5.4% and government spending was 2% lower year-on-year.

"The reasons for the decline in consumption are clear: unemployment is rising and wages are falling," Karmen Hren, the head of macroeconomic statistics at the Statistics Office, told the press.

Consequently, Slovenia also recorded a trade surplus of 5.4% of GDP in the first quarter, "the highest in a long time." The answer to where the surplus originates from lies in exceptionally weak domestic demand, she said.

Seasonally and working days adjusted data for the first quarter showed Slovenia's GDP shrinking by 3.3% on a year earlier.

Value added dropped across all sectors. The construction sector, which has been hammered since the start of the crisis, saw a deepening in decline, as it output fell by 16.9% on an annual level.

Significant drops in value added were seen also in agriculture, fisheries and forestry (7.7%), in trade, transport and the hospitality industry (4.9%) and in manufacturing (3%).

The figures indicate forecasts of Slovenia's economic trends this year may have been overly optimistic.

Domestic and foreign forecasters projected an annual contraction of the economy by the end of the year of between 2% and 2.5%. Meanwhile, a Bloomberg survey of six economists carried out ahead of today's release of official data projected a first quarter contraction of 2.9%.

The government's macroeconomic think-tank, IMAD, said the contraction was "one of the sharpest in the eurozone". "The Q1 figures show that the economy remains very weak," it said.

The head of the Employers' Association, Jože Smole, said the figures were "shocking" and a result of companies' inability to obtain financing.

"Companies cannot function normally...If we don't tackle that, I see no way anything will change shortly," he said.

Janez Posedi, one of the top public sector unionists, meanwhile takes the figures as a signal to the government to stop taking orders from Brussels.

"If the government doesn't get serious and realises that it also has to focus on the domestic economy, the Q2 contraction will hit 6% or more," he said, adding that this would put an end to any hopes of a recovery this decade.