Slovenia Q1 GDP down 4.5pc q/q, full virus impact yet to emerge

• Slovenia's economy expanded by 2.4% in 2019.
• Household spending fell by 6.4% year-on-year while gross investments were down by 3.3%.

LJUBLJANA: Slovenia's economy shrank by 4.5% quarter-on-quarter in the first three months of 2020 as the coronavirus impact began to be felt and exports fell 1.6% year-on-year, in their first decline since the second quarter of 2012, the statistics office said.

Analysts said figures were in line with expectations and the worst of the economic impact had yet to be seen, as Slovenia introduced a general lockdown in the middle of March and started easing restrictions from April 20.

GDP fell by 2.3% year-on-year versus an increase of 1.7% in the last quarter of 2019, the office said in a report on Friday. Slovenia's economy expanded by 2.4% in 2019.

Household spending fell by 6.4% year-on-year while gross investments were down by 3.3%. Imports decreased by 2.5%.

"I expect the worst GDP fall in the second quarter following which there should be a rebound, which will depend upon the pace of the reopening of the economy," Luka Flere, the head of the investment sector at Generali Investments, told Reuters.

He expects Slovenia's GDP to fall by 8% to 10% for the whole of 2020 before a rebound in 2021. The government's macroeconomic institute UMAR sees GDP rising by 3.5% next year while the European Commission sees it up by 6.7%.

Slovenia has so far confirmed 1,473 coronavirus cases and 108 deaths. In the middle of May it declared the end of its coronavirus epidemic, becoming the first European state to do so, but kept a number of restrictions in place.

During the lockdown many companies had to reduce or suspend production because of a lack of demand for their products. Slovenia exports about 80% of its production, mostly to other EU states. Main exports include cars, car parts, pharmaceutical products and household appliances.