Ljubljana, 31 May (STA) - With a new boost in exports, Slovenia's economy grew by 2.1% in real terms the first quarter of the year on the same period last year and by 0.3% on the previous quarter, seasonally-adjusted data from the Statistics Office show.
GDP growth thus remains at roughly the same level for the fourth consecutive quarter. The seasonal and working days impact excluded, Slovenia's GDP increased by 2% year-on-year in the first quarter.
The seasonally-adjusted GDP growth rate is used by the EU's statistical office Eurostat for comparisons between EU member states.
Slovenia's GDP grew by an annual rate of 1.9% in the final quarter of 2010 according to seasonally-adjusted data and by 2.1% according to unadjusted data.
The first quarter saw little change in the structure of economic growth; exports demand remains the main engine of growth, while domestic spending remains subdued with little outlook for improvement, Karmen Hren of the Statistics Office told the press on Tuesday.
Exports of goods and services expanded by 10.6% year-on-year in the first quarter, up from 6.6% in the previous quarter.
However, the growth of imports was even more pronounced at 11.1% year-on-year, which is why the impact of the external balance of goods and services on growth was slightly negative (-0.2 percentage points).
Domestic demand grew at an annual rate of 2.2%, which is roughly on a par with growth observed in the previous quarters, Hren said.
Gross capital formation grew slightly faster than in the previous quarters (4.6%), but mainly on account of an increase in inventories, which contributed 2.3 percentage points to economic growth.
However, gross fixed capital formation slumped for the tenth consecutive quarter, down 6.1% year-on-year in Q1, mainly due to a new sharp decline of investment in construction.
"The falls in investment in construction buildings and structures are especially strong, the slump in the first quarter being even more pronounced than in the previous quarters, shrinking by 20% year-on-year."
Hren added that a rough estimate would be that investment in construction fell to the level of ten years ago in real terms.
Meanwhile, investment in machinery and equipment increased by an annual rate of 10%. "These investments prevent an even stronger decline in investment in capital goods."
Final consumption expenditure had grown at an annual rate of between 1% and 1.5% in the past few quarters. "We can possibly even talk about a stagnation of consumption by households, which is very important, representing over 50% in the structure of GDP."
Value added in manufacturing grew by around 10% at the annual level, the effect of which on growth was nullified by a 20% slump in the value added in construction, according to Hren.
Had it managed to stabilise the slowdown in construction, Slovenia would record an economic growth of just over 3% provided other indicators remained unchanged, Hren said.
Finance Minister Franc Krizanic agreed at a press conference in Ljubljana that construction was the main problem, but announced measures to help the sector, including a call against dumping in public procurement.
Nevertheless, the minister is upbeat about the latest GDP figures, which he said reflected a relatively stable and safe economic recovery.
He expects the results to improve further in the future, also with the help of a series of government measures.
Meanwhile, economist Igor Masten does not expect any major improvement. "There is no sign whatsoever that the things will improve much any time soon."
The Institute of Macroeconomic Analysis and Development (IMAD), a government think-tank, noted that the structure of economic growth showed a continuation of last year's trends, which it said were even more pronounced than expected.
Apart from the further growth in exports, a fast recovery in imports and the prolonged slowdown in construction, IMAD also pointed to a drop in employment in the public sector.