Slovenia: Economy grows at fastest pace on record in Q2, returning to pre-pandemic levels
GDP growth sped up to 16.3% year-on-year in the second quarter, from 1.7% in the first quarter. The country’s GDP is now above its pre-pandemic levels.
The upturn reflected improvements in private consumption, public spending, fixed investment and exports. Private consumption increased 18.8% in the second quarter, which contrasted the first quarter’s 0.6% contraction, coming on the back of the gradual lifting of restrictions in mid-April and the lifting of the state of emergency in mid-June. Public consumption sped up to a 1.4% increase in Q2 (Q1: +0.5% yoy). Fixed investment growth sped up to 19.2% in Q2, from the 7.8% increase logged in the previous quarter.
On the external front, exports of goods and services increased a huge 30.2% on an annual basis in the second quarter, which was above the first quarter’s 1.4% expansion. In addition, imports of goods and services growth picked up massively, to 34.9% in Q2 (Q1: +0.9% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic growth gathered steam, picking up to 1.9% in Q2, compared to the previous period’s 1.5% growth.
Analysts at Erste Bank commented on the release:
“The outlook for economic growth remains favorable, with most recent Q2 data additionally confirming encouraging recovery momentum initiated already in Q1 21. Domestic demand is expected to remain the main growth driver, where private consumption should continue to increase on the back of the stabilizing labor market and improving sentiment, with the investment rebound remaining vivid and further supported by the EU funds. The recovery of Slovenia’s main trading partners should continue to favor the exports outlook, while a pick-up in consumption and investment would boost imports’ performance. Taking into the account the overall better than expected H1 21 performance, we’re putting our current FY21 GDP forecast (5%) under upward revision.”