Economic and Political Overview

flag Slovenia Slovenia: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

Slovenia has been an open market since its successful economic transition in the 2000s. As a member of the European Union since May 2004 and of the Eurozone since 2007, Slovenia is an advanced, independent, and stable country. After contracting due to the COVID-19 pandemic, Slovenia’s GDP rebounded in 2021 and continued its positive trend in 2022 (+2.5%). In 2023, Slovenia's real GDP is estimated to have grown by 1.3% (EU Commission). Private consumption exhibited modest growth during the initial three quarters, while construction investment experienced significant expansion. Conversely, investments in machinery and equipment declined. For 2024, GDP is projected to expand by 1.9%, followed by a further increase of 2.7% in 2025. The beginning of 2024 is anticipated to witness restrained growth due to weak sentiment and subdued demand for exports. However, sustained robust investment, bolstered by the Recovery and Resilience Plan (RRP), coupled with the resurgence of demand in export markets, is expected to enhance growth prospects over the forecast period. Moreover, both private and public consumption are anticipated to accelerate, propelled by a resilient labor market and rising wages.

Fitch Ratings anticipated the general government deficit to reach approximately 3.8% of GDP between 2023 and 2024, a rise from the 3% recorded in 2022. The government has earmarked EUR 700 million (1.1% of GDP) for post-flood reconstructions in 2023 and EUR 1.1 billion in 2024. The fiscal deficit should narrow to around 2% of GDP in 2025. The public debt-to-GDP ratio is expected to decrease gradually to 62.6% by 2025, down from 74.7% in 2022 (IMF). Significant cash reserves, amounting to 13% of GDP in 2Q23, offer flexibility in financing. While higher financing costs may lead to a gradual rise in debt service expenses, the favorable maturity profile, with a weighted average maturity of around 10 years, will mitigate the immediate impact. Inflation saw a significant decline throughout 2023, particularly in energy, with food prices also beginning to slow down in the last quarter. The average inflation rate for the year stood at 7.2%. In 2024, headline inflation is expected to decrease to 2.9%, driven by moderating energy costs and subdued demand. Despite ongoing wage pressures, HICP inflation is forecast to drop further to 2.0% in 2025 (EU Commission).

Unemployment has been on a declining trend in recent years: it was estimated at 3.6% in 2023 and should remain relatively stable in the upcoming future (IMF). According to the latest data from Eurostat, around 13% of the population is at risk of poverty or social exclusion, the second-lowest ratio in the EU. Nevertheless, poverty amongst the senior population, consisting of mostly women and marginalized minorities, is an area of severe concern; to address this, the government deployed a specific strategy for elder people. Overall, the World Bank estimated the country’s GDP per capita (PPP) at USD 50,032 in 2022, just below the EU average.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 60.1168.2472.1075.1078.59
GDP (Constant Prices, Annual % Change) 2.51.62.02.52.7
GDP per Capita (USD) 28,52732,23334,02635,43037,077
General Government Balance (in % of GDP) -3.9-3.0-2.3-2.1-2.5
General Government Gross Debt (in % of GDP) 72.368.567.567.166.4
Inflation Rate (%) 8.87.42.72.02.0
Unemployment Rate (% of the Labour Force) 4.03.73.73.83.8
Current Account (billions USD) -0.613.051.941.601.66
Current Account (in % of GDP) -1.04.52.72.12.1

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Slovenia has a skilled and productive labor force of around 1.05 million people out of its 2.1 million population. The agricultural sector is declining and accounts for only 1.8% of the GDP, employing around 4% of the population (World Bank, latest data available). The country counts 68,331 agricultural holdings, with the total utilized agricultural area equating to 30.6% of the total area, and 5.5% of agricultural holdings dedicated to organic production. Forestry is a key economic factor, with 66% of the land area forested and an annual production value of EUR 250 million contributing to the economy. According to the latest figures by the Slovenian Statistical Office, the nominal value of agricultural production was expected to amount to EUR 1,575 million. The value of crop production was projected to decrease by 12%, due to a volume increase of 5% and a price decrease of 16%.

The industrial sector represents 28.1% of GDP and almost one-third of employment (30%). Historically, the dominant industries in Slovenia have been forestry, textiles, and metallurgy. Since the 1980s, mechanical industries (automobiles, tool machines) and high-value-added industries (electronics, pharmacy, and chemicals) have experienced significant development. The World Bank estimates the manufacturing sector to contribute 20% of GDP. Slovenia's industrial production saw a 5.3% decrease in 2023. Comparatively, the mining and quarrying sector saw growth of 7.4% year over year. However, the crucial manufacturing sector declined by 8.1%, and the electricity, gas, steam, and air conditioning supply sector experienced a significant downturn of 36.3% (Slovenian Statistical Office).

The tertiary sector remains the most significant in the Slovenian economy. It represents 58% of the GDP and employs 65% of the total workforce, showing a strong growth pattern over the last ten years, especially in information and communications technology (ITC), financial, commercial services, and retail business. The tourism sector is dynamic and has experienced strong development in recent years. After suffering due to the COVID-19 pandemic, Slovenia welcomed over 6 million visitors in 2023 who spent more than 16 million nights, representing the highest tourism figures on record according to data from the country's Statistical Office. Retail sales turnover in Slovenia went down 11.5% in 2023, following a 20.3% increase in the previous year, according to the same source. According to the latest figures from the European Banking Federation, the Slovenian banking sector comprises 11 commercial banks, three savings banks, and two branches of foreign banks.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.1 30.0 65.9
Value Added (in % of GDP) 1.7 29.0 57.8
Value Added (Annual % Change) 2.2 2.1 8.1

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 MUR 0.030.030.020.030.02

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
68,3/100
World Rank:
48
Regional Rank:
28

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.75/10
World Rank:
34/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

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Foreign Trade in Figures

Slovenia is highly open to foreign trade, which represents about 186% of the country's GDP (World Bank, latest data available). This high level of openness makes Slovenia very dependent on the economic health of its main commercial partners: the country is integrated within German and Austrian production chains for automobiles and electrical and electronic equipment, and in Swiss chains for the pharmaceuticals industry, and generates more than half of its goods exports from these four sectors. The largest share of total trade in 2023 was medicinal and pharmaceutical products, constituting approximately one-third (34%) of the total export value. Following closely were products in the categories of road vehicles (8.4%), electrical machinery, apparatus, and appliances (6.7%), general industrial machinery and equipment (4.1%), and petroleum, petroleum products, and related materials (3.7%). Regarding imports, organic chemicals took precedence, accounting for 19.0% of the total imports and displaying a twofold increase compared to the previous year. They were succeeded by medicinal and pharmaceutical products (14.3%), road vehicles (8.0%), petroleum, petroleum products, and related materials (6.1%), and electrical machinery, apparatus, and appliances (5.2% - data Statistics Slovenia).

Data from Statistics Slovenia show that in 2023 the main export destinations were Switzerland (27.3% of the total), Germany (13.5%), Italy (8.6%), Croatia (7.8%), and Austria (5.7%); while the country imported the most in terms of value from Switzerland (16.4%), China (13.0%), Germany (12.2%), Italy (10.3%), and Austria (7.2%). The EU accounted for 55.5% of total exports and 55.9% of imports.

Slovenia’s overall trade balance is structurally positive; however, the country is a net importer of goods: in 2022, both exports and imports of goods stood at USD 69.7 billion, while services’ exports reached USD 11.6 billion against USD 7.8 billion in imports. The latest data from Statistics Slovenia show that, in 2023, the country exported EUR 54.9 billion worth of goods (+4.4% y-o-y) while importing EUR 56.9 billion (+0.6%).

 
Foreign Trade Indicators 20192020202120222023
Imports of Goods (million USD) 44,00742,22557,56069,76171,445
Exports of Goods (million USD) 44,94344,83257,35269,71673,034
Imports of Services (million USD) 6,4385,8017,3988,0168,559
Exports of Services (million USD) 9,6937,9919,99211,65612,746
Imports of Goods and Services (Annual % Change) 4.7-9.617.69.8n/a
Exports of Goods and Services (Annual % Change) 4.5-8.614.56.5n/a
Imports of Goods and Services (in % of GDP) 75.168.577.388.8n/a
Exports of Goods and Services (in % of GDP) 83.777.783.690.4n/a
Trade Balance (million USD) 1,4562,6651,072-2,288n/a
Trade Balance (Including Service) (million USD) 4,7074,8553,6661,352n/a
Foreign Trade (in % of GDP) 158.8146.2160.9179.1n/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
Switzerland 21.0%
Germany 14.5%
Croatia 8.4%
Austria 6.6%
France 3.4%
See More Countries 46.1%
Main Suppliers
(% of Imports)
2022
Switzerland 15.4%
China 11.9%
Germany 10.7%
Austria 6.7%
Croatia 4.0%
See More Countries 51.3%

Source: Comtrade, Latest Available Data

 
 

Main Products

55.3 bn USD of products exported in 2022
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 25.0%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 4.8%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 4.5%
Electrical energyElectrical energy 2.8%
Human blood; animal blood prepared for therapeutic...Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excl. yeasts) and similar products 2.4%
See More Products 60.5%
59.6 bn USD of products imported in 2022
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 13.1%
Heterocyclic compounds with nitrogen hetero-atom[s...Heterocyclic compounds with nitrogen hetero-atom[s] only 8.0%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 8.0%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.6%
Electrical energyElectrical energy 3.5%
See More Products 63.9%

Source: Comtrade, Latest Available Data

 
 

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Sources of General Economic Information

Ministries
Ministry of the Economy, Tourism and Sport
Ministry of Finance
Statistical Office
Statistical Office
Central Bank
Bank of Slovenia
Stock Exchange
Ljubljana Stock Exchange
Search Engines
Leading search engine including maps, news, images and other services (in local language only)
Economic Portals
State Administration Portal on business issues
Slovenian Business Portal

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Political Outline

Current Political Leaders
President: Natasa PIRC MUSAR (since 23 December 2022)
Prime Minister: Robert GOLOB (since 1 June 2022)
Next Election Dates
Presidential: 2027
National Council: 2027
National Assembly: 2026
Main Political Parties
Slovenia is a parliamentary republic with a multi-party system. The major parties in Slovenia are:

- Freedom Movement (GS): centre to centre-left, party to the ruling coalition government
- Slovenian Democratic Party (SDS): centre-right
- Social Democrats (SD): centre-left
- The Left (Levica): eco-socialist
- New Slovenia (NSi): centre-right, pro-European

Other parties include:
- List of Marjan Sarec (LMS): social-liberal, populist, primary opposition party
- Party of Alenka Bratušek (SAB): centre, social liberism
- Democratic Party of Slovenian Pensioners (DeSUS): centrist, party to the ruling coalition government
- Slovanian National Party (SNS): slovenian nationalism
- Alliance of Social Liberal Democrats (ZSD).

Type of State
 Republic based on parliamentary democracy.
Executive Power
The President is the head of the state and is elected by a popular vote for a five-year term (renewable once). The role of the President is largely ceremonial. Following parliamentary elections, the leader of the majority party or the leader of a majority coalition is usually nominated to become Prime Minister by the President and elected by the National Assembly to serve a four-year term. The Prime Minister is the head of the government and enjoys the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers (cabinet) is nominated by the Prime Minister and elected by the National Assembly.
Legislative Power
The legislature is bicameral in Slovenia. The parliament consists of:

  • National Assembly (the lower house) having 90 seats; out of which 88 are elected through proportional voting and 2 members are elected by ethnic minorities, members serve four-year terms,
  • National Council (the upper house, more like an advisory body) having 40 seats; with its members elected indirectly (members representing social, economic, professional, and local interests) to serve five-year terms.

The National Assembly is the most important power centre in the country. The executive branch of government is directly or indirectly dependent on the support of the National Assembly. The Prime Minister cannot dissolve the parliament, only the president can do it in certain circumstances.

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
36/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) in Slovenia, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: May 2024