The Slovenia Times

Light at the end of the Tunnel: Slovenia Out of Recession


.Adjusted for working days and season (the gauge used by the EU statistics office Eurostat), GDP grew by 1.2% from the third quarter of last year and rose by 1.9% compared to the final quarter of 2012.

"In the last quarter of last year, Slovenia exceeded the average economic growth in the EU," An┼że Podnar of the Statistics Office said. He warned, however, that this was not a guarantee of lasting growth.

"We cannot say for certain that the crisis is over...all we can say is that there is a short-term break in the slowing of economic activity," Podnar added, saying that for a definite end of the crisis, the majority of economic indicators will have to return to levels seen prior to the crisis.

The latest seasonally- and working days-adjusted data also shows that Slovenia recorded quarter-on-quarter growth in economic activity throughout last year. In the first quarter GDP grew by 0.1% on the quarter before, and then expanded by a further 0.2% in Q2, by 0.4% in Q3 and by 1.2% in Q4.

The economic growth in the final quarter was boosted by investment. Gross fixed capital formation expanded by 5.9% y/y as investment in construction surged by 11.1%, mostly due to the construction of civil engineering structures. Gross fixed capital formation in machinery and equipment rose by 2.9%.

The statisticians also recorded a recovery in private consumption, which was boosted by 3%. Private final consumption remained flat compared to the final quarter of 2012 although consumption of durable products fell again by 4.5%.

Contraction in government spending slowed down to 1.9%. The drop was mainly due to savings in health and social care.

External demand continued to reflect positively on GDP growth, but due to a strong growth in imports the external trade balance had a negative impact on growth (-0.7 percentage points).

Exports rose by 3.7%, a slowdown from a 4% growth the quarter before, while imports increased by 4.9%, mainly on account of import of fuels and lubricants and motor vehicles as well as import of construction and consultancy services.

"This is a consequence of imports in energy products and vehicles on the goods side, services and consultancy services on the services side," said Podnar.

Value added increased in most activities, especially in construction, where it soared by 7.7%. "This is the first time since 2008 that investment in buildings increased. We are now at 47% of levels from then," he said.

In manufacturing, value added increased by 2.1% after eight consecutive quarters of decline. In accommodation and food services, value added increased less than in the previous quarter, by 1.4%.


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