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Economic and political overview

Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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, when growth was estimated at 5.7% according to the IMF (5.1% as per the EU Commission figures), as private consumption continued to increase and investments proved robust. On the other hand, the trade balance in goods turned negative, with an export-import ratio of 93.2% (Statistics Slovenia). Global economic uncertainty and the tightening of financial conditions should hamper growth in 2023, with the IMF forecasting a GDP increase of 1.7%, while the EU Commission has a more conservative outlook (+1%). Investment is forecast to continue growing, sustained by EU RRF-supported public investments. For 2024, the IMF projects growth at 3%.

Strong revenue performance and some under-execution in spending helped reduce the budget deficit from 6% of GDP in 2021 to 3.9% last year. Around 2% of GDP has been budgeted in emergency measures for 2023 (mostly related to the rise in energy prices), with the government deficit projected at 3.2%. Conversely, the country’s debt-to-GDP ratio went down to 69.5% in 2022 (from 74.4% one year earlier) and is expected to follow a downward trend over the forecast horizon (at 66.7% this year and 63.6% in 2024 - IMF) supported by GDP growth. Sound debt management and long average maturities (10 years) significantly reduce financing risks (Fitch Ratings). Fuelled by the rise in energy prices and the consequent spill-over on industrial goods, food and services, inflation spiked in 2022 reaching 8.9%. With global energy prices easing and growth remaining weak, headline inflation is projected to decrease to 5.1% in 2023 and 3.3% the following year, closer to the European Central Bank’s target.

Unemployment has been on a declining trend in recent years: it was estimated at 4.3% in 2022 and should remain stable in the upcoming future. The EU Commission expects wage growth to be robust in 2023, partly compensating for the increased cost of living. According to the latest data from Eurostat, 13.2% 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 IMF estimated the country’s GDP per capita (PPP) at USD 49,968 in 2022.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 60.1168.3973.8778.8183.11
GDP (Constant Prices, Annual % Change) 2.52.02.22.62.8
GDP per Capita (USD) 28,52732,35034,91437,26939,326
General Government Balance (in % of GDP) -3.9-3.9-2.7-2.2-1.8
General Government Gross Debt (in % of GDP) 72.668.566.564.763.4
Inflation Rate (%) n/a7.44.23.12.4
Unemployment Rate (% of the Labour Force) 4.03.63.83.94.0
Current Account (billions USD) -0.613.042.832.492.39
Current Account (in % of GDP) -1.04.43.83.22.9

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Slovenia has a skilled and productive labour force of around 1 million people out of its 2.1 million population. The agricultural sector is declining and accounts for only 1.7% of the GDP, employing around 4% of the population (World Bank, latest data available). The country counts 68,331 agricultural holdings, the total utilized agricultural area equates to 30.6% of the total area, with 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 to the economy. According to the latest figures by the Slovenian Statistical Office, the value of the agricultural output in 2022 was estimated at EUR 1,670 million, showing a year-on-year increase of 1% in volume terms and 20% in price terms. The value of crop production was 15% higher than in 2021: although production was 1% lower, prices increased by 16%.

The industrial sector represents 28.5% of GDP and one-third of employment (34%). Historically, the dominant industries in Slovenia have been the forestry, textile, and metallurgical industries. Since the 1980s, the mechanical industries (automobile, tool machines) and the high-value-added industries (electronics, pharmacy, and chemicals) have been greatly developed. The World Bank estimates the manufacturing sector to contribute 20% of GDP. Slovenia's industrial production expanded by 1.7% in 2022, following a 10.2% rise in the previous year (Slovenian Statistical Office).

The tertiary remains the most significant sector in the Slovenian economy. It represents 57.7% of the GDP and employs 62% of the total workforce, and has shown a strong growth pattern during the last ten years, especially in the fields of information and communications technology (ITC), financial, commercial services, and retail business. The tourism sector is very dynamic and has been undergoing a period of strong development in recent years. After suffering due to the COVID-19 pandemic, the sector recovered in 2022 when Slovenia was visited by around 5.9 million tourists, who generated almost 15.6 million overnight stays, 27.5% more than the previous year, of which about 65% were from foreign tourists. 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.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

Slovenia is highly open to foreign trade, which represents about 161% 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: Slovenia 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 2022 was contributed from chemicals and related products (34.0% of exports and 31.9% of imports), followed by machinery and transport equipment (26.7% of exports and 22.7% of imports), manufactured goods classified chiefly by material (16.4% of exports and 14.5% of imports), miscellaneous manufactured articles (about 8.2% of exports and 7.0% of imports), and mineral fuels, lubricants and related materials (8.0% of exports and 13.8% of imports – data Statistics Slovenia).

Data from Statistics Slovenia show that in 2022 the main export destinations were Switzerland (21% of total exports), followed by Germany (14.4%), Italy (10.6%), Croatia (8.4%), Austria (6.7%) and France (3.3%); whereas imports came chiefly from Switzerland (14.6% of total imports), followed by Germany (12.5%), Italy (11.5%), China (8.9%), Austria (8.4%) and Croatia (5%). Slovenia has an external trade deficit with EU member states that has been decreasing in recent years. On the other hand, the country has had an external trade surplus with EU non-member countries.
 
Slovenia’s trade balance is structurally positive: in 2021 the trade surplus stood at 6.3%of GDP (from 9.2% one year earlier), according to the World Bank. Both exports and imports of goods increased during the year: exports stood at USD 57.3 billion (+28% y-o-y), while imports grew at a faster pace totalling USD 57.5 billion (+36.6%), slightly above exports. The country is a net exporter of services, with exports totalling USD 9.7 billion and imports at USD 6.9 billion (+24.6% and +27.6%, respectively). According to the latest figures from the Slovenian statistical office, in 2022 exports amounted to EUR 52.9 billion and imports to EUR 56.8 billion, growing by 34.2% and 36.6% respectively, marking the second year in a row in which Slovenia recorded a deficit in merchandise trade.

 
Foreign Trade Values 20182019202020212022
Imports of Goods (million USD) 42,26744,00742,22557,56069,738
Exports of Goods (million USD) 44,20044,94344,83257,35269,701
Imports of Services (million USD) 6,4966,4385,5967,0877,860
Exports of Services (million USD) 9,5949,6937,9469,99111,628

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 161.1158.8146.2160.9179.1
Trade Balance (million USD) 1,5111,4562,6651,072-2,288
Trade Balance (Including Service) (million USD) 4,5994,7074,8553,6661,352
Imports of Goods and Services (Annual % Change) 7.14.7-9.617.69.8
Exports of Goods and Services (Annual % Change) 6.24.5-8.614.56.5
Imports of Goods and Services (in % of GDP) 76.375.168.577.388.8
Exports of Goods and Services (in % of GDP) 84.883.777.783.690.4

Source: World Bank ; Latest available data

Foreign Trade Forecasts 2023 (e)2024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change) 0.92.42.83.53.6
Volume of imports of goods and services (Annual % change) -3.23.94.04.14.1

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Slovenia is a member of the EU since 1st May, 2004 and as such is a member of the EU Customs Union.
 

Main Partner Countries

Main Customers
(% of Exports)		 2022
Switzerland 21.0%
Germany 14.5%
Italy 10.6%
Croatia 8.4%
Austria 6.7%
See More Countries 38.8%
Main Suppliers
(% of Imports)		 2022
Switzerland 15.3%
China 11.9%
Germany 10.5%
Italy 10.5%
Austria 6.7%
See More Countries 45.1%

Source: Comtrade, Latest Available Data

 

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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:

- Slovenian Democratic Party (SDS): centre-right, party to the ruling coalition government
- List of Marjan Sarec (LMS): social-liberal, populist, primary opposition party
- Social Democrats (SD): centre-left
- The Left (Levica): eco-socialist
- New Slovenia (NSi): centre-right, pro-European
- Party of Alenka Bratušek (SAB): centre, social liberism
- Concretely: liberal, centrist
- Democratic Party of Slovenian Pensioners (DeSUS): centrist, party to the ruling coalition government
- Slovanian National Party (SNS): slovenian nationalism.

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. 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.

 

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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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