Slovenia: Economy gains traction in the third quarter
November 30, 2018
Detailed national accounts data released by the country’s Statistical Office on 30 November revealed that the economy sped up in the third quarter, with annual GDP growth climbing to 4.8%, up from 4.0% in the second quarter. Although exports decelerated on cooling growth in the Eurozone, the external sector led the expansion owing to a sharper deceleration in imports.
On the domestic side of the economy, overall demand continued to expand at the same solid pace in Q3 as the previous quarter. Looking at a breakdown of the components, private consumption growth tumbled in Q3, coming in flat despite low inflationary pressures (Q2: +1.5% year-on-year). Government spending also expanded at a weaker pace, growing 2.5% in the third quarter following a 4.9% rise in the second quarter. The downturn in these sub-components was offset by an upturn in fixed investment growth from 10.7% in Q2 to 12.0%, despite a slight moderation in business confidence. The print was driven by investment in machinery and equipment, along with non-residential buildings.
Growth in the quarter was driven by the external sector, which made a bigger contribution to the expansion. Exports lost pace, growing 5.7% in Q3, down from 9.1% in Q2. Import growth also weakened, from 9.2% in the second quarter to 4.3% in the third quarter. Despite a slowdown in both exports and imports, the external sector’s contribution to growth rose to 1.7 percentage points, from 0.8 percentage points in Q2.
On a seasonally- and working-day adjusted, quarter-on-quarter basis, the economy grew 1.3% in the third quarter, gaining speed from the revised 0.9% expansion recorded in the second quarter (previously reported: +0.8% quarter-on-quarter). Meanwhile, in seasonally- and working-day adjusted annualized terms, GDP growth climbed to 5.0% in Q3, up from a revised 4.6% in Q2 (previously reported: +4.3% year-on-year).
Author: Nihad Ahmed, Economist