Economic Growth at 5.4% in Q1
Slovenia's economy expanded at an annual rate of 5.4% in the first quarter of this year, boosted by rising investment in construction, the Statistics Office said on Monday.
"Growth was higher than in the last quarter of last year. This means the trend has not turned down this year, but sharply upwards," Karmen Hren, who is responsible for national accounts at the office, told reporters in Ljubljana.
She admitted though that Q1 growth was not as high as it had been between the second quarter of 2006 and the third quarter of 2007.
This was also highlighted by the Institute of Macroeconomic Analysis and Development (IMAD), a government think-tank, which said growth would slow down.
The slowdown is already evident, for example slower growth in manufacturing and exports, IMAD director Bostjan Vasle said in a statement.
Hren singled out robust growth in gross fixed capital formation as the main reason for the growth spurt in the first quarter.
Gross capital formation increased by 17.6% year-on-year, contributing 5.4 percentage points to the real GDP growth, Hren said, noting that investments had again rated more prominently than exports in the structure of GDP.
Gross fixed capital formation rose by 17.1%, mainly on account of the 25.1% rise in investment in buildings and structures. Investment in residential buildings was up 16.3% and investment in non-residential buildings up 28.5%.
The growth of investment in machinery and equipment was more modest at 7.5% and on a par with the growth at the end of 2007.
Exports, which had been a key factor of economic growth in the past,increased by 6.3%. "Exports continue to grow, but at a somewhat slower pace," Hren said.
Imports were up by 9.4%, which is on a par with growth in Q4 of 2007. As imports increased more than exports, this reflected negatively on the GDP volume growth (2.3 percentage points).
Final consumption showed no major changes, adding 3.4% at the annual level. Expenditure of households and of general government increased by 3.4%, which means the growth in the general government expenditure rose compared to 2007.
Total value added increased by as much as GDP (5.4%). The biggest increase was registered in construction (27.4%), which recovered after a slowdown in the second half of 2007.
"Construction contributed 1.5 percentage points to GDP growth on the production side," Hren said.
Value added in manufacturing, which has the biggest share in GDP, increased by 1.9%, which Hren said was considerably lower than last year and even the lowest on record for the last three years.
Employment continued to grow at accelerated rates for the tenth quarter in a row. Q1 employment was 3.1% up year-on-year. Construction recorded the biggest increase (13.5%), followed by transport (6.6%) and the business sector (6.1%).
Seasonally and working days adjusted GDP was up 2.2% on the last quarter of 2007 and 5.7% on the first quarter of 2007. Q1 GDP at current prices amounted to EUR 8.5bn and was up 10.7% year-on-year.
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