Slovenia: Q1 GDP hits near-decade high as investment soars
May 31, 2017
GDP growth surprised to the upside in Q1, according to figures recently published by the Statistical Office. GDP accelerated at a nearly nine-year high of 5.3% year-on-year in Q1, coming in handily above Q4’s 2.6% print and comfortably beating market analysts’ expectations of a 3.3% expansion. Substantial growth in domestic demand resulting from a double-digit acceleration in fixed investment drove Q1’s print, while a strengthening external sector once again contributed positively to growth following Q4’s one-off negative contribution.
Domestically, private consumption growth was broadly stable in Q1 at a healthy 4.0% (Q4: +4.1% year-on-year)—likely due to rising employment, especially in the manufacturing sector—while government consumption growth slowed to 1.7% (Q4: +2.8% yoy). On the other hand, fixed investment jumped by a near-decade high of 12.0% (Q4: +3.8% yoy), largely on the back of increased construction investment in both residential and non-residential buildings. Meanwhile, inventories contributed negligibly to overall GDP growth in the quarter.
The external sector also experienced a strong quarter. Annual export growth nearly doubled from a quarter earlier to 8.7% (Q4: +4.6% yoy) as acceleration in the shipment of goods picked back up to the robust levels last recorded in Q2 2016. Growth in the export of services slowed from a quarter earlier, although it did remain robust. Import growth also accelerated, rising to 8.8% (Q4: +6.3% yoy) on the back of stronger domestic demand for goods, while demand for imported services waned from a quarter earlier. All told, the external sector recorded a solid turnaround in Q1 and contributed 0.8 percentage points to growth in the quarter (Q4: negative 0.8 percentage points).
On a seasonally- and working day-adjusted basis, GDP expanded at a quarter-on-quarter pace of 1.5% in Q1, accelerating from Q4’s revised 1.3% pace (previously reported: +1.2% quarter-on-quarter) and recording the fastest sequential expansion in more than three years. On an annualized basis, GDP growth accelerated at the fastest rate since Q2 2008 (Q1: +5.0% yoy; Q4: +3.8% yoy).
Author: Christopher Thomas, Economist