Consumption in Slovenia

Slovenia - Consumption

Growth moderates in the fourth quarter

Detailed national accounts data released by the country’s Statistical Office on 28 February revealed that growth moderated in the fourth quarter of last year, coming in at 4.1% year-on-year, after logging a revised 5.0% expansion in the third quarter (previously reported: +4.8% yoy). Slower domestic demand weighed on the headline reading, despite upbeat external sector gains. In annual terms, the economy expanded 4.5% in 2018, a tad above Consensus.

On the domestic side, overall demand logged the weakest quarterly print of last year, mainly due to a deceleration in fixed investment from an upward revised 13.8% in Q3 (previously reported: +12.0% yoy) to 8.2% in Q4. Government spending also expanded at a weaker pace, growing 1.5%, after recording a revised 2.6% increase in Q3 (previously reported: +2.5% yoy). On a brighter note, private consumption pushed the throttle in Q4 and rose by 2.1% (Q3: +1.2% yoy), amid milder inflation and a tighter labor market.

Meanwhile, the external sector gained steam in the fourth quarter. Exports grew 6.8% in Q4, up from a revised 5.4% in Q3 (previously reported: +5.7% yoy), while imports rose 6.6%, above the revised 5.5% logged a quarter prior (previously reported: +4.3% yoy). All said, the external sector contributed 0.7 percentage points to growth, from a revised 0.5 percentage points in Q3 (previously reported: 1.7 percentage points).

On a seasonally- and working-day adjusted, quarter-on-quarter basis, the economy grew 0.8% in the fourth quarter, losing pace from the 1.3% expansion recorded in the third quarter.).

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 3.4% in 2019, which is down 0.1 percentage points from last month’s forecast. They see growth moderating to 2.9% in 2020.