Slovenia Q2 GDP Grows as Consumer Confidence Strengthens

Slovenia's gross domestic product (GDP) expanded by 0.7% in the second quarter compared to a year earlier, after shrinking in the first quarter. The increase was driven by private consumption, according to the Statistics Office.

In seasonally adjusted terms GDP grew by 0.7% at the quarterly and by 0.8% at the annual level, in what the Economy Ministry said was an expected trend, CE Report quotes The Slovenia Times.

In the previous quarter it declined by a revised 0.6% in what was the first contraction in five years.

The rebound was fuelled mainly by strong consumer spending, which jumped 3.6%, the biggest rise in recent quarters.

Slovenia's central bank said private consumption was buoyed by improved consumer confidence, propped up by a significant rise in public sector wages.

Businesses also stocked up with inventories up sharply, pushing overall investment higher despite a small drop in spending on buildings and equipment.

Trade was a weak spot: exports slipped by 0.8%, while imports grew. As a result, foreign trade dragged GDP down by 2.7 percentage points.

Most sectors expanded, but manufacturing and finance/insurance shrank. Employment fell slightly, with the steepest job losses in manufacturing and construction.

According to the central bank, the latest data put the economy on track to growing at a rate of 1.3% this year, assuming that trade picks up in the second half of the year.

The latest national and international forecasts put the economic growth rate for the full year at between 1.3% and 2%, with the central bank's on the lower end of the scale.