After growing by 1.6% in 2024, Slovenia’s GDP is forecast to increase by 2.0% in 2025 and 2.4% in 2026. Inflation is expected to remain rather stable over the forecast horizon and the unemployment rate to remain low. The general government deficit dropped markedly to 0.9% of GDP in 2024 and is forecast to increase to 1.3% of GDP in 2025. The debt-to-GDP ratio is projected to decrease, from 67.0% in 2024 to 65.5% in 2025 and 63.8% in 2026.
| Indicators | 2024 | 2025 | 2026 |
|---|---|---|---|
| GDP growth (%, yoy) | 1,6 | 2,0 | 2,4 |
| Inflation (%, yoy) | 2,0 | 2,1 | 1,9 |
| Unemployment (%) | 3,7 | 3,7 | 3,8 |
| General government balance (% of GDP) | -0,9 | -1,3 | -1,5 |
| Gross public debt (% of GDP) | 67,0 | 65,5 | 63,8 |
| Current account balance (% of GDP) | 4,6 | 4,7 | 4,8 |
Growth set to continue, supported by domestic demand and exports
GDP grew by 1.6% in 2024, supported by private consumption and exports. Following the 2023- boom in construction, both residential and non-residential construction decreased in 2024, accompanied by a fall in investment in machinery and equipment. The contribution from net exports turned negative as imports increased by 3.9% while exports grew by 3.2%. Terms of trade continued to improve and the current account surplus increased. Employment growth was modest compared to recent years, while real wages increased substantially at around 4,2%.
Despite global headwinds, GDP growth is forecast to accelerate to 2.0% in 2025 and to 2.4% in 2026. Private consumption is projected to continue to expand in 2025 and 2026, still supported by employment growth and rising wages. However, the savings rate is expected to increase to around 13.5% in 2025. Public investment is set to remain buoyant thanks to the continued deployment of RRF-financed investment and the pursuit of reconstruction works after the floods. Private investment, on the other hand, is projected to be strongly influenced by global uncertainty and lower global demand. In 2025, exports are set to increase slightly stronger than export market demand, as market share increase is projected to continue. In 2026, similar trends continue: growth is expected to continue to be supported by domestic demand, with investment growth also picking up.
The labour market remains tight
The employment rate is at a historic peak but further small gains are still expected, as employment is forecast to increase by 0.6% in 2025 and 0.7% in 2026, driven by inflows of foreign workers. The unemployment rate fell to 3.7% and wages increased by over 6% in 2024. The unemployment rate is set to remain stable over the forecast horizon. With the labour market remaining very tight, wages are forecast to increase by 5.6% in 2025 and by 4.7% in 2026. Following three years of decline, real unit labour costs increased slightly in 2024 and are projected to continue to increase over 2025-26.
Inflation set to increase slightly in 2025
Inflation fell to 2% in 2024, reaching its lowest in the third quarter at 1.1%. However, it increased to 2.1% in the first quarter of 2025. The impact of lower energy prices over the forecast horizon is offset by the projected increase in food and services prices. Inflation is forecast to average 2.1% in 2025 and 1.9% in 2026. Inflation excluding energy and food is also expected to increase to 2.2%, driven by increases in services prices.
Public debt on a declining path
The general government deficit declined markedly to 0.9% of GDP in 2024, due to high property income revenues and temporary tax increases aimed at financing reconstruction following the 2023 floods.
In 2025, the general government deficit is projected to widen somewhat to 1.3% of GDP. Revenue is set to increase due to the new long-term care contribution paid from wages and pensions and the higher CO2 emissions tax. Higher revenue from these sources is projected to be partially offset by higher social transfers in kind due to the new long-term care system, which is being phased in gradually. A higher wage bill is projected as part of an on-going reform of the public sector wage grid. Higher subsidies for the green transition, in particular for a gradual exit from coal, are expected to be only partially offset by a withdrawal of the last remaining measures to mitigate the impact of high energy prices.
In 2026, the general government deficit is forecast to increase to 1.5% of GDP mostly due to the continued phasing in of the public sector wage reform. Higher economic growth and the full-year impact of the new long-term care contribution is also expected to lead to higher revenue.
The debt-to-GDP ratio is forecast to decrease gradually from 67.0% in 2024 to 65.5% in 2025 and to 63.8% in 2026 thanks to a debt-decreasing interest-growth-rate differential, while primary deficits are set to contribute marginally to debt developments.