Slovenia's gross domestic product (GDP) accelerated to 5.2% in real terms in Q2 over the same period last year, up from 2.6% in the first quarter. Growth was buoyed in particular by surging exports and domestic expenditure, Slovenia's Statistical Office reported on Friday.
The growth was largely fuelled by the external trade balance, which added 4.7 percentage points to the GDP growth figure. Compared to the second quarter of 2004, exports increased in volume terms by 10.9% while import growth was much slower than in the previous quarters (3.6%).
Domestic expenditure also provided a positive push, but its contribution was smaller this quarter than in the previous ones. The main reason lies in the 7.3% drop in gross capital formation, which is mainly the result of a decrease in inventories (changes in inventories depressed GDP growth by 2.9 percentage points).
According to Karmen Hren, who is in charge of national accounts at the Statistical Office, inventories were strong in the same period last year because of uncertain expectations about the country's EU entry, but they cleared up quickly this year.
Gross fixed capital formation increased by 2.6% in volume terms; investments in buildings and structures were up 8.6% and investments in machinery and equipment decreased by 3% compared to the second quarter of 2004, according to the statisticians.
Final consumption expenditure was up 3.7% and is showing an upward trend. Private expenditure increased by 4.1% and government final consumption expenditure by 3.2%. Private spending was underpinned by higher net wages, which surged 8% in the first half of the year, according to Hren.
Total value added by activities was up 5% compared to the second quarter of 2004. Financial intermediation (15.2%) and construction (10.4%) saw the biggest jump in value added, but Hren noted that it was too early to tell whether this was a one-off or the beginning of a long-term trend.
Employment increased at the annual level by 0.8%; the number of employees edged up by 1% and the number of self-employed dropped by by 0.2 percent.
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