The Slovenia Times

Growth Picks Up Pace in Q1, GDP Up 2.9% Y/Y

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After a dip in the final part, growth returned to rates seen in the middle of last year, figures released by the Statistics Office on Friday show.

Adjusted to working days and season (the gauge used by the EU statistics office Eurostat), GDP rose by 0.8% compared to the fourth quarter of 2014, while expanding 3% year-on-year.

Unlike a year ago, a combination of expansion in investment and final consumption - rather than exports - provided the momentum in the first quarter, fuelled by an expansion in manufacturing.

Gross capital formation and domestic expenditure saw their biggest increase since the country emerged from recession in late 2013, expanding by 11.8% and 2.6% year-on-year, respectively.

Gross fixed capital formation were down by 0.8% but inventory growth, an important gauge of trends in business, grew by 2.5% on the same quarter of 2014.

Final spending was up 0.2%, as a drop in government spending of 0.5% was offset by a rise in household spending of 0.4% and non-profit institutions serving households of 3.6%.

Export growth subsided from the 8.4% annual rate seen in the previous quarter to 5.4%, which was on par with import growth. The balance in external trade contributed 0.5 percentage points to GDP expansion, the least since the end of 2013.

"Nevertheless, the share held by exports in GDP continues to rise, growing from 58% at the start of the crisis to 80%. Exporters have strengthened global competitiveness mostly on account of increased productivity," An┼że Podnar of the Statistics Office told the press.

Value added in manufacturing was up 7.1% year-on-year on the back of a rise in the automotive industry to lead the way among all sectors in the first quarter.

Tourism-related activities also saw significant jumps in output, with the hospitality sector expanding by 5%. The retail sector saw a 3.8% rise in value added.

Weakness remained in the crisis-hit financial and construction sectors, where value added contracted by 3.5% and 1.7%, respectively.

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