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Slovenia Business Week no. 10: Slovenian Economy Expands by 5.2% in 2006

Slovenia's economy expanded by 5.2% last year, one of the fastest rates of annual growth in the last decade, fuelled by exports and domestic spending

Slovenia's economy expanded by 5.2% last year, one of the fastest rates of annual growth in the last decade, fuelled by exports and domestic spending, shows preliminary data released on Friday, 9 March by the Statistics Office.

According to the office, economic growth in the final quarter of 2006 stood at 5.5%, the fourth consecutive quarter that the economy expanded at near or above 5%.

The strong fourth quarter followed an even stronger third quarter, when Slovenia's GDP grew by 5.6%.

The growth for 2006 is the second-fastest rate of economic expansion in Slovenia since 1995. According to Karmen Hren of the Statistics Office, it is the fastest rate of growth since 1999, when the Slovenian economy grew by 5.4%.

Domestic spending provided an important boost to growth last year, rising by 5.5%, data from the Statistics Office shows.

Even more important, though, was the rise in exports, which contributed 6.5 percentage points to economic growth.

The growth in domestic spending was fuelled by a 11.9% increase in gross fixed capital formations, as investment into buildings and equipment flourished.

"The main reason for the high growth in investment into buildings was the intensive construction of non-residential structures (office buildings, roads, bridges, etc.)," said Hren, who is in charge of national accounts at the Statistics Office.

According to her, the spell of warm weather in the autumn and winter months allowed an extended construction season, which contributed to higher growth.

The construction sector expanded by 11.8% and manufacturing by 7.4% last year to fuel the economic expansion, she added.

"The manufacturing sector alone contributed 1.6 percentage points to overall growth," Hren explained.

Meanwhile, the trade balance was slightly negative, as the growth in imports (10.4%) slightly exceeded the growth in exports (10%) last year.

The Slovenian gross domestic product at current prices in 2006 stood at EUR 29.741bn, which amounts to EUR 14,811 per person.

Moreover, employment rose by 1.2% in 2006 to amount to stand at 927,000 people in employment. The biggest growth was recorded in construction (7.4%) and business services (5.4%).

Meanwhile, the number of employed persons fell by 1.7% in the manufacturing sector despite the increase in value added.

Source: Slovenian Press Agency STA

Author: STA, Slovenian National Press Agency