Slovenia: GDP marks the softest contraction since last year
September 3, 2013
In the second quarter, GDP contracted 1.7% over the same quarter last year, which marks an improvement over the 4.6% drop recorded in the first quarter (previously reported: -4.8% year on year). The decline in Q2 is the softest that has been recorded since Q1 2012.
The milder decrease in Q2 reflects an improvement in domestic demand (Q1:-7.8% yoy, Q2: -3.4% yoy) driven by a softer contraction in private consumption (Q1:-5.2% yoy, Q2: -2.1% yoy). On the other hand, public spending fell 3.1% over the same period last year (Q1: -1.8% yoy), while gross fixed investment decreased 3.0% in Q2 (Q1: -3.3% yoy).
Meanwhile, exports of goods and services rose 2.0% in Q2, which represents an improvement over the 1.7% increase recorded in the first quarter, and imports fell 0.1% (Q1: -2.3% yoy). As a result, the external sector's net contribution to overall economic growth deteriorated from plus 3.1 percentage points in the first quarter to plus 1.6 percentage points in the second.
On a quarter-on-quarter basis, GDP fell a seasonally and working-day adjusted 0.3% in Q2, which followed the 0.5% decline recorded Q1 (previously reported: - 0.7% qoq).
The Central Bank expects the economy to contract 1.9% in 2013 and then start a modest recovery in 2014, with GDP expanding 0.5%. FocusEconomics Consensus Forecast panellists expect the economy to decline 1.5% in 2013, which is unchanged over the previous month's projection. For 2014, the panel sees the economy growing 0.4%.
Author: Dirina Mançellari, Senior Economist