GDP in Slovenia

Slovenia - GDP

GDP growth slows in Q1 but remains brisk

GDP growth moderated to 9.8% year-on-year in the first quarter, from 10.4% in the fourth quarter of last year. The slowdown was due to weaker private and public consumption and export growth.

Household spending growth waned to 20.0% year-on-year in Q1 from a 22.9% expansion in Q4. Government spending growth softened to the slowest pace since Q4 2021, expanding 2.9% (Q4 2021: +7.0% yoy). Meanwhile, fixed investment growth accelerated to 12.7% in Q1, from the 11.0% expansion in the previous quarter.

Exports of goods and services growth fell to 7.7% in Q1, marking the weakest reading since Q1 2021 (Q4 2021: +12.1% yoy). In addition, imports of goods and services growth waned to 15.7% in Q1 (Q4 2021: +16.8% yoy), marking the softest reading since Q1 2021.

On a seasonally-adjusted quarter-on-quarter basis, economic growth lost steam, cooling to 0.8% in Q1, compared to the previous period's 5.3% increase. Q1's reading was the weakest since Q4 2020.

Noting that the annual Q1 GDP growth figure exceeded their expectations, analysts at Erste Bank commented on the outlook:

“Going forward we expect to see GDP growth decelerating amid a high base effect, increasing price pressures and war in Ukraine. While domestic demand is seen remaining a key growth pillar, private consumption momentum should ease in the coming quarters, taking into account the strong base effect and influence of [a] higher inflation footprint. Investment activity should maintain an overall steady role, still supported by the EU funds […]. On the external demand side, as already confirmed in previous quarters, strong export dynamics should continue to be offset by rising pressures on the imports side.”

FocusEconomics analysts project the economy to expand 4.2% in 2022, which is down 0.2 percentage points from last month’s forecast. In 2023, the economy is seen growing 2.9%.