In the first quarter of 2017 Slovenia’s gross domestic product (GDP) increased by 5.3% over the first quarter of 2016. Seasonally adjusted GDP increased by 1.5% over the previous quarter and by 5% over the first quarter of 2016, statistical office announced on May 31.
After Slovenia’s GDP expanded by a real 2.5% y/y in 2016 (according to the first estimate of the statistical office), slowing from 2.9% y/y in 2015, the economy is expected to maintain the positive trend in 2017. The European Commission expects Slovenia's 2017 GDP growth to reach 3.3% while the International Monetary Fund (IMF) forecasts 3% and European Bank for Reconstruction and Development (EBRD) growth of 2.5%.
In Q1 substantial growth of domestic consumption was observed - it increased by 5% over the fourth quarter of 2016, the statistical office said. High growth was observed in both components of domestic consumption: final consumption expenditure and gross capital formation. Final consumption expenditure increased by 3.4% and contributed 2.4 percentage points to GDP growth. Final consumption expenditure growth was observed already in the previous quarter (3.7%). Gross capital formation, which increased by 1% in 2016, increased by 10.5% in the first quarter of 2017 and contributed 2.1 percentage points to GDP growth.
Gross fixed capital formation increased by 12% due to high growth of construction investment and gross fixed capital formation in other machinery and equipment. Meanwhile, gross fixed capital formation in machinery and equipment increased at a similar rate to the previous quarter; it increased by 9.3% (in the fourth quarter of 2016 by 9.4%). Gross fixed capital formation in transport equipment increased by 10.5%, and gross fixed capital formation in other machinery and equipment by 8.8%.
Final consumption expenditure also had a positive impact on the Slovene economy. Household final consumption increased the most (by 4%). Households increased the consumption of all types of goods. As in all quarters of 2016, they increased the most their consumption of durable goods.
The statistical office added that after the slowdown of imports and exports in the previous two quarters, in the first quarter of 2017 higher growth of imports and exports was observed. The growth rates were almost equal; imports increased by 8.8% and exports by 8.7%. Even though imports increased faster than exports, the external trade balance remains high.