Slovenia GDP Q4 2021


Slovenia: GDP growth in Q4 accelerates at fastest pace in Euro area

March 10, 2022

GDP growth accelerated to 10.4% year on year in the fourth quarter, from 5.0% in the third quarter. The growth figure was the highest in the Euro area. The print meant that growth last year overall was 8.1%, the highest annual growth figure since Slovenia achieved independence in 1991.

The upturn largely reflected an improvement in private consumption, which increased 22.9% year on year in Q4 compared to a 7.2% expansion in Q3. The marked improvement came despite tougher Covid-19 restrictions imposed from November in response to the arrival of the Omicron variant. Thus, in comparison to past quarters, it appears that the economy had become more resilient to Covid-19 thanks to adaptation to the pandemic by consumers and firms.

Meanwhile, public consumption grew at the fastest pace in over a decade, expanding 7.0% (Q3: +3.2% yoy). Fixed investment growth rose to 11.0% in Q4, above the 10.5% increase recorded in the prior quarter.

On the external front, exports of goods and services growth accelerated to 12.1% in Q4 (Q3: +11.6% yoy). Conversely, imports of goods and services growth waned to 16.8% in Q4 (Q3: +19.1% yoy).

On a seasonally-adjusted quarter-on-quarter basis, economic growth gathered significant traction, accelerating to 5.4% in Q4, from the previous period's 1.3% expansion. Q4's reading marked the best result since Q3 2020.

Noting that the Q4 GDP growth figure “exceeded expectations”, analysts at Erste Bank commented on a a less optimistic outlook:

“While 2021 bought strong rebound […] outlook once again gets gloomier amid [the] invasion of Ukraine and rising geopolitical tensions. [Our current forecast reflects] ongoing favorable trends on the domestic demand side, especially [with] private consumption as, among others, [a] supportive base effect would extend also in Q1 2022, while investment activity should also maintain [an] overall steady role. On the external demand side, as already revealed in previous quarters, strong exports dynamics [will be] offset by the rising pressures on the imports side, thus deflating net exports contribution. In the light of current events, we underline downside risks to the forecast amid uncertainty over the further development of the conflict and its impact on the external demand and overall sentiment.”

FocusEconomics analysts project the economy to expand 4.0% in 2022, which is up 0.1 percentage points from last month’s forecast. In 2023, the economy is seen growing 3.3%.


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Slovenia GDP Chart

Slovenia GDP Q4  2021 0

Note: Year-on-year changes of GDP in %.
Source: Statistical Office of the Republic of Slovenia (SORS) and FocusEconomics Consensus Forecast.

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