Slovenian GDP Continues with Slowdown of Growth in Q3 2019

In the third quarter of 2019, GDP of the Republic of Slovenia increased by 2.3% over the third quarter of 2018. As a reminder in Q2, GDP observed an increase of 2.5%.

According to the Statistical Office of Slovenia, domestic expenditure regained its strength increasing by 3.8% YoY and returning to the territory towards 5% where this growth was last time evidenced in Q3 and Q4 of 2018. That domestic demand is gaining momentum was evidenced by an increase in households’ consumption, that was up 4.3% YoY. Increase in household consumption is in line with increase in employment that was up 2.3% YoY in Q3 2019. On the other hand, investment growth decelerated further and it has in Q3 evidenced growth of only 1.2% YoY and surprised on the downside. Government expenditure growth accelerated a bit, rising 1.8% YoY, coming closer towards 3.0% – an average growth in the last several quarters. This figure is in line with expectation of surplus in Slovenian budget for 2019. Exports of goods and services increased by 4.5% YoY, decelerating by 50 bp compared to Q2, while majority of slow-down was evidenced in exports of services. Export of goods increased by 5% YoY, 50bp up from Q2 showing that demand from Slovenia’s trading partners still exists. Imports increased by 6.7% YoY driven by strong domestic demand resulting in negative contribution from external trade balance which continues to be the main reason for deceleration of GDP in the third quarter.

In Slovenia, like in other CEE countries, the strong trend of acceleration of domestic demand is evidenced due to continued rise of employment and loose monetary policy. As investments and external demand weaken, the growth of economy slows and we don’t expect this trend to reverse in the near term. It remains to be seen how long can domestic demand keep the pace and if government will start increasing spending in order to boost economy. 

wdt_ID Slovenian GDP Q3 2018 Q1 2019 Q2 2019 Q3 2019
1 Domestic expenditure 5,2 2,3 2,1 3,8
2 Final consumption expenditure 2,5 2,8 3,0 3,7
3  -Households 2,2 2,4 3,8 4,3
4   -NPISH 4,9 1,2 0,1 2,8
5   -General government 3,2 3,9 1,0 1,8
6 Gross capital formation 14,5 0,7 -0,7 4,4
7   -Gross fixed capital formation 11,9 10,0 6,9 1,2
8   -Changes in inventories and valuables 0,7 -1,7 -1,5 0,7
9 External trade balance 0,0 1,2 0,5 -1,2
10 Exports of goods and services 4,2 4,9 5,0 4,5

Source: Statistical Office of Slovenia

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