Slovenian economy grows 3.5% in 2008

BELGRADE, March 9 (Chinese media) -- Slovenia's economic growth for the whole year stood at 3.5 percent in 2008 despite the negative growth in the final quarter, the country's statistical authorities said on Monday.

Growth in the first half of the year stood at a robust 5.6 percent, before cooling to 3.6 percent in the third quarter and dropping into negative territory in the final quarter.

Presenting preliminary GDP data for the fourth quarter of 2008,Karmen Hren of the Statistics Office told the press that the key factor for the contraction was a 9.4 percent drop in exports.

Significant drops were also seen in the output of the manufacturing sector and in gross fixed capital formations, which fell by 5.3 percent.

"There has been only one quarter with a bigger drop in gross fixed capital formations in the past 12 years, that is the second quarter of 2000, when investments fell by 10 percent," Hren was quoted as saying by the official Slovenian news agency STA.

The Institute for Macroeconomic Analyses and Development (IMAD),a government think tank, said that the slowdown in growth was a result of the rapid transfer of the financial crisis to other sectors. This has had a strong impact on exports and investment, said IMAD.

According to IMAD, the fall in orders from abroad has had the biggest impact on Slovenia's manufacturing sector.

Hren said that the most worrying trend in industry was the 10.5percent contraction of the manufacturing sector. While a downturn had been noticed in the third quarter, the final quarter "saw a nosedive," she said.

Hren said that while the economic downturn has already had an impact on the labor market, the full effects will likely be felt with a delay.