Ljubljana, 31 August (STA) - Slovenia's economy grew 2.2% in real terms year-on-year in the second quarter, the first rise in GDP after six consecutive quarters of contraction, the Statistics Office said Tuesday. Compared to the previous quarter seasonally and working day adjusted GDP rose 1.1%.
"Q2 growth ends a protracted period of of decline in real GDP," said Karmen Hren, who heads the national accounts department at the Statistics Office.
Growth was underpinned by strong exports, which rose 11.4%, close to pre-crisis rates. Similarly, imports were up 10%. "The foreign trade balance maintains a positive contribution to growth of 1 percentage point," Hren explained.
Exports also buoyed value added in manufacturing, which surged 13.9%, the fastest growth in 18 years. But the construction sector continues to struggle, as value added in construction plunged 14.1% with no signs of recovery in sight.
The contraction in construction shaved off one whole percentage point of GDP, according to Hren.
Gross capital formation was up 6.4% but gross fixed capital formation continued to decrease, a trend that began at the end of 2008.
Final consumption expenditure remained flat year-on-year, with Hren saying there were no signs of strong growth. Household spending was up 0.3% and government spending rose 0.7%.
The statisticians also revised GDP figures for 2009, downgrading the contraction to 8.1% from 7.8%.
The Institute of Macroeconomic Analysis and Development (IMAD), a government think-tank, said the figures bear out its forecast that growth would recover as Slovenia's main trading partners emerge from recession, but it also pointed to continued downside risks.
"The domestic environment is providing weaker incentives, which is associated with the situation in construction...and labour market trends, neither of which show visible signs of recovery," IMAD director Bostjan Vasle said in a statement.
Vasle also noted that exports grew from a very low base. "We may therefore expect that growth rates will ease off significantly, in particular in the final quarter."