Slovenia: GDP growth records slowest increase since Q1 2021 in Q3
November 15, 2022
GDP growth lost momentum in the third quarter, falling to 3.4% year on year from 8.3% in the second quarter. Q3's reading marked the slowest growth since Q1 2021. The slowdown was due to weakening private and public spending. That said, exports added support.
Household spending growth slowed sharply to 2.6% year-on-year in Q3 compared to a 12.6% expansion in Q2. Government consumption dropped 0.9% in Q3 (Q2: +0.7% yoy). Meanwhile, fixed investment growth moderated to 7.1% in Q3, marking the worst result since Q4 2020 (Q2: +7.3% yoy).
Exports of goods and services growth sped up to 11.0% year on year in the third quarter. (Q2: +8.6% yoy). Conversely, imports of goods and services growth waned to 10.8% in Q3 (Q2: +11.6% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic activity dropped 1.4% in Q3, contrasting the previous quarter's 0.2% expansion. Q3's reading marked the largest downturn since Q2 2020.
The economy is set to lose further steam in Q4 and H1 2023, driven by slowing private consumption and exports, before rebounding in H2 2023.
On the outlook, EIU analysts commented:
“We expect Slovenia's annual growth to slow to 1% in 2023. Slovenia's direct exposure to Russian gas cut-offs is comparatively low, and gas shortages are unlikely, given a pipeline to Italy and support from Croatia. However, gas flows from Germany could be compromised, and prices will remain very high. […] Global supply-chain frictions are now starting to ease, but shortages of intermediate goods such as semiconductor chips will continue to limit industrial activity in Germany and Italy, Slovenia's main export markets […] Tourism activity will also be limited, as Slovenia's main visitor sources are countries expected to be worst hit by gas shortages: Austria, the Czech Republic, Germany, Hungary and Italy.”
Author: StStefan Poseafan, Junior Economist