Slovenia: GDP growth in 2017 shoots up to a ten-year high
February 28, 2018
The economy shifted into a higher gear in the final quarter of last year, firming up Slovenia’s position as one of the fastest-growing economies in the Eurozone in 2017. Growth in annual terms jumped to 6.0% in Q4 (Q3: +4.5% year-on-year), powered by a surge in domestic demand and a strong external sector. According to the preliminary estimate, full-year GDP reached 5.0% in 2017, above 3.2% in 2016 and the best print in a decade.
In annual terms, domestic demand grew 4.5% in Q4, accelerating from 2.9% in the previous quarter. Underpinning this rise was a notable climb in fixed investment growth to 11.9% year-on-year (Q3: +7.4% yoy), thanks to higher construction investment, especially in non-residential buildings, and a boost in gross fixed capital formation in machinery and equipment. Also contributing to the expansion in domestic demand was a significant jump in government spending, which rose 5.6% in Q4 (Q3: +1.7% yoy). While private consumption also picked up, it accelerated at a more moderate rate, growing 3.3% (Q3: +3.0% yoy).
A robust external sector also helped drive the economy. Exports continued growing at a double-digit pace, expanding 12.3% yoy in Q4 (Q3: +11.9% yoy). Growth in imports also edged up, but grew at a slightly more moderate rate compared to exports (Q4: +11.1% yoy; Q3: +10.7% yoy). The external sector’s contribution to growth dropped two notches, however, moderating to 1.7 percentage points in Q4 from 1.9 percentage points in Q3.
On a seasonally- and working day-adjusted, quarter-on-quarter basis, economic growth shot up to 2.0% in the final quarter, up from a revised 1.2% expansion in the third quarter (previously reported: +1.0% quarter-on-quarter). In seasonally- and working-day adjusted annualized terms, GDP growth climbed to 6.2% in Q4, up from a revised 5.1% in Q3 (previously reported: +4.9%).
Author: Nihad Ahmed, Economist