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Slovenia Business Week no. 52/2004: Slovenia's Economy Grows by 4.9% in Q3

After a growth of 3.9 percent in Q1 and 4.7 percent in Q2, GDP increased by 4.9 percent in real terms in Q3, year-on-year

Slovenia's gross domestic product (GDP) continued to grow in the third quarter of this year, as the economy expanded by 4.9 percent compared to the same period last year. In the first nine months of the year, GDP increased by 4.5 percent over 2003.

After a growth of 3.9 percent in Q1 and 4.7 percent in Q2, GDP increased by 4.9 percent in real terms in Q3, year-on-year. "Growth is gradually slowing down," Karmen Hren of the national Statistics Office told the press on Wednesday, 15 December.

Slovenia posted a 2.9-percent growth in the last quarter of 2003, adding 1 percentage point in the first quarter of 2004. In the second quarter, the addition to the rate of growth was a mere 0.8 percentage points, and only 0.2 percentage points were added in Q3.

GDP at current prices amounted to SIT 1,592bn (EUR 6.6bn) in Q3, up 7.9 percent year on year. Gross national income meanwhile increased by 8.1 percent.

The third quarter was marked by an upturn in the foreign trade balance. In previous quarters, the foreign trade balance negatively affected economic growth, with exports rising faster than imports. The situation has now turned - the trade balance added almost 1 percentage point to the rate of economic growth.

The high, almost 15-percent, rise of exports and imports in real terms noted in Q2 slowed down in Q3 and returned to the level of the beginning of the year, when exports and imports rose by 10 percent.

Domestic spending did not affect economic growth as much as in previous quarters, according to the Statistics Office. It added 4 percentage points to economic growth, which is about 1.5 percentage points less than in Q2. The main reasons are the slightly slower growth of gross fixed capital formation and a smaller increase in the inventories than that of the first two quarters of this year.

Final consumption expenditure continued to grow; households expenditures increased by 3.8 percent, which was about 1 percentage point higher growth than in 2003, and government expenditures growth also increased at the same time.

Employment was 0.3 percent above last year's level, and so Q3 broke a three-year downward trend in employment, said Hren.

The GDP statistics for Q4 are expected to be released on 15 March 2005, according to the Statistics Office.

Source: Slovene Press Agency STA

Author: STA