Slovenia: GDP slows in the first quarter
May 31, 2011
In the first quarter, GDP added 2.0% over the same period last year. The result represented a slight deceleration compared with the 2.1% expansion recorded in the fourth quarter of 2010. A quarter-on-quarter analysis also suggests a moderation, as GDP growth slowed from a seasonally and working-day adjusted 0.5% in the fourth quarter to 0.3% in the first. In the first quarter, the slowdown was primarily driven by strong domestic demand (+2.2% year-on-year). Fixed investment remained depressed for the tenth quarter in a row (Q1: -6.1% yoy; Q4: -5.8% yoy), while gross capital formation continued to build, due to strong inventory restocking. Meanwhile, private consumption growth slowed from 1.6% in the fourth to 1.2% in the first quarter. The external sector, which is Slovenia's main economic engine, improved somewhat compared to the previous quarter. Exports expanded 10.6% over the same quarter last year (Q4: +6.6% yoy), while imports rose 11.1% (+7.0% yoy). As a result, the net contribution from the external sector to overall economic growth stepped up from a minus 0.5 percentage points to a less pronounced 0.2 percentage point detraction. At the sector level, strong gains in manufacturing (Q1: +10.0% yoy) were offset by further losses in construction (Q1 2010: -19.9% yoy). According to the OECD forecast released on 25 May, GDP is expected to grow 1.8% in 2011, while the organisation sees the economy expanding 2.6% next year.