Business News

Slovenia Plunges Back into Recession (I)

Ljubljana, 29 February (STA) - Slovenia officially slid back into recession as its economy contracted by 2.8% in real terms in the final quarter of last year, shrinking at a rate of 0.2% in the whole of 2011, according to the Statistics Office.

Seasonally and working-days adjusted, Slovenia's GDP contracted by 0.7% in Q4 compared to the quarter before, while it grew by 0.2% last year, the office said in its first estimate on Wednesday.

The contraction in the last quarter follows a 0.5% reduction in the economic activity in real terms in the third quarter of 2011, with recession defined as two consecutive quarters of negative growth.

External demand continued to have a positive impact on economic growth, but the growth in exports slowed down to 3.0% year-on-year in Q4, which is significantly lower than growth rates in the second half of 2010 and first half of 2011.

There was a pronounced contraction in domestic demand at a rate of 4.4% y/y in Q4 with all elements of domestic demand down: household and government spending (by -1.8% and 2.6%, respectively), and capital formation, which contracted by as much as 12.3%.

Value added decreased in most activities, dropping by 2.6% y/y in manufacturing, by 15.5% in construction and by 1.5% in trade, transport and catering. Value added only increased in the sector of non-market services (public administration, education, health, by 1.0%) and in real estate (0.5%).

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