Slovenia’s economy has been resilient in the face of successive external shocks, including the evolving conflicts in the Middle East and Russia’s war of aggression against Ukraine. Sustaining growth will require strengthening public finances, boosting investment, enhancing resilience to trade shocks and harnessing the opportunities offered by AI, according to a new Economic Survey of Slovenia.
GDP growth is projected to pick up to 1.9% in 2026 and 2.2% in 2027 from 1.1% in 2025. Inflation is projected to increase from 2.5% in 2025 to 3.3% in 2026 before declining to 2.6% in 2027.
“Slovenia has achieved stronger growth since 2022 than OECD countries and euro area countries on average, while unemployment remains close to a historic low,” OECD Deputy Director of Country Studies Isabell Koske said, presenting the Survey in Ljubljana alongside Slovenia’s State Secretary at the Ministry of Finance Peter Papež. “To sustain this growth and strengthen economic resilience, Slovenia should continue to reduce public deficits and ensure long-term fiscal sustainability, while boosting investment, further diversifying trade, reducing barriers to capital flows and broadening AI adoption.”
Recent fiscal reforms have improved Slovenia’s economic situation in the short term, but further adjustments of the pension system may be needed in the longer term. In addition, to optimise revenues, the tax burden on labour should be reduced and the revenues replaced by more growth-friendly taxes on consumption and property.
As a highly open economy, Slovenia has benefited significantly from trade, with exports playing a key role in its economic success. In the context of elevated trade tensions and heightened geopolitical uncertainty, Slovenia should further strengthen trade resilience by diversifying its imports and facilitating trade, including through enhanced co-operation among state trade agencies.
AI adoption in Slovenia is relatively high, though concentrated among larger, more productive and digitally advanced firms. Broadening AI adoption could generate significant productivity gains and support long-term growth. Expanding workforce upskilling programmes, including through a broader reskilling strategy, would help accelerate AI adoption. Attracting skilled foreign workers would also ease labour and skills shortages.
Shallow capital markets continue to weigh on investment and long-term growth, limiting firms’ access to financing, particularly for innovative start-ups. High household savings remain concentrated in real estate and bank deposits, while private pensions and other institutional investors play only a limited role in capital markets. Encouraging greater competition in financial markets, reducing tax incentives for property investment and broadening private-funded pensions would help channel more savings towards productive investment. Reducing public ownership in the insurance sector and easing excessive regulatory barriers in services professions would also support investment and stronger long-term growth.
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