Consumption in Slovenia

Slovenia - Consumption

Growth slows in Q1 on falling inventories

The economy grew 3.2% year-on-year in the first quarter of 2019, according to detailed data released by Slovenia’s Statistical Institute on 31 May. This was down noticeably from the 4.1% year-on-year acceleration recorded in the final quarter of last year, as the weakest increase in domestic demand in three years took effect. Although most components posted solid gains, a contraction in inventory growth dragged on the overall expansion.

Domestically, household consumption grew 2.9% annually in the first quarter (Q4 2018: +2.0% yoy), the fastest pace in a year, amid upbeat employment and moderate inflation. In addition, fixed investment rose 9.3% in annual terms, accelerating from the previous quarter’s 8.2% expansion. Government spending also gathered momentum in Q1, coming in at 3.6% (Q4 2018: +1.5% yoy). However, a fall in inventory growth subtracted 2.1 percentage points from the overall expansion, after contributing 0.4 percentage points in the previous quarter.

Meanwhile, the external sector strengthened in the first quarter. Export growth accelerated to 7.6% in annual terms (Q4 2018: 6.8% yoy), while import growth decelerated to 6.4% in Q1 (Q4 2018: +6.6% yoy). All told, the external sector contributed 1.6 percentage points to growth in Q1, after adding 0.7 percentage points to growth in Q4 2018.

On a seasonally- and working-day adjusted, quarter-on-quarter basis, the economy grew 0.8% in the first quarter, marginally up from Q4’s 0.7% upturn.

The Central Bank expects GDP growth of 3.4% in 2019 and 3.0% in 2020. FocusEconomics Consensus Forecast panelists expect the economy to grow 3.3% in 2019, which is unchanged from last month’s forecast, before moderating to 2.8% in 2020.