Slovenia: GDP declines at steeper pace in final quarter of 2020
GDP declined at a sharper pace of 4.5% year-on-year in the fourth quarter, below the 2.4% contraction seen in the third quarter. The print meant GDP fell 5.5% in 2020 as a whole after growing 3.2% in 2019, marking the worst drop since the Great Recession.
Household spending fell 14.5% in Q4, which was significantly below Q3’s 0.6% contraction, dragged down by the tightening of restrictions throughout the quarter. However, public consumption improved to a 2.8% increase in Q4 (Q3: +1.3% yoy). Meanwhile, fixed investment rebounded, growing 2.0% in Q4 and contrasting the 0.8% decrease logged in the prior quarter, amid a robust construction sector.
Exports of goods and services contracted at a softer pace of 0.4% year-on-year in the fourth quarter (Q3: -9.5% yoy). In addition, imports of goods and services declined at a milder rate of 2.0% in Q4 (Q3: -12.5% yoy), marking the best reading since Q1 2020. While exports and imports of goods returned to growth, services trade was depressed by muted travel and tourism.
Going into 2021, the economy should benefit from the recent easing of restrictions in February and the likely further lifting of lockdown measures in the coming months, which should drive a rebound in private consumption. However, delays in the vaccine rollout and a slower-than-expected resumption of international trade pose downside risks to the outlook.