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Slovenia Business Week no. 27: Slovenia's GDP Growth at 4.9% in the Second Quarter

Buoyed by domestic consumption, gross domestic product (GDP) grew at a rate of 4.9% year-on-year in the second quarter of 2006, down slightly from 5.1% in the first quarter of the year, according to preliminary data by the National Statistical Office

The importance of domestic consumption for GDP growth increased for the fourth quarter in a row: it contributed 4.5 percentage points to the 4.9% growth, somewhat more than in the previous quarter, Karmen Hren, the head of national accounts at the Statistical Office, told the press on Friday, 08 September.  

This can largely be attributed to gross capital formation, whose growth is much higher in 2006 than it was in 2005. The second component of domestic consumption, namely final consumption expenditure, is growing by about 3.5% at an annual level.  

Within final consumption, private consumption increased in real terms by 3.3% year-on-year. Government consumption expenditure was up 4.1%, mainly due to the substantial increase in the intermediate consumption in collective services.  

After brisk growth at the beginning of the year, exports and imports slowed down in the second quarter, with the growth rates returning to the levels of 2005.  

Exports expanded at an annual rate of 8.6%, down from 14.9% in the previous quarter, while import growth slowed down to 8% from 13.5% in the first quarter.  

Consequently, the external trade balance contributed only 0.4 percentage points to GDP growth, down from one percentage point in the first quarter.  

Overall growth in value added also slowed down from 5.1% to 4.4%, whereby it nearly halved in manufacturing, to 4.8%, but soared in financial intermediation (10.7%) and mining and quarrying (10.3%).  

High GDP growth is also reflected in constant employment growth. According to the national accounts, the national payroll stood at 928,000, up 0.9% year-on-year. Employment increased in all sectors of the economy.  

Seasonally and working days adjusted GDP expanded by 5.6% compared to the second quarter of 2005 and grew 2.8% over the previous quarter.  

At current prices, Slovenia's GDP amounted to SIT 1,816bn (EUR 7.57bn) in the second quarter, up 7.2% over the year before.

Author: STA, Slovenian National Press Agency