17.11.2025
Slovenia’s GDP is forecast to increase by 1.0% in 2025, by 2.4% in 2026 and 2.6% in 2027. Employment is expected to be stable and the unemployment rate to remain low. Inflation is forecast to remain elevated over the forecast horizon. The general government deficit is set to increase from 0.9% of GDP in 2024 to 2.2% in 2025, 2.3% in 2026 and peak at 2.5% in 2027. The debt-to-GDP ratio is projected to decrease from 66.6% in 2024 to 63.1% by 2027.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 1.0 | 2.4 | 2.6 |
| Inflation (%, yoy) | 2.5 | 2.3 | 2.1 |
| Unemployment (%) | 3.4 | 3.5 | 3.5 |
| General government balance (% of GDP) | -2.2 | -2.3 | -2.5 |
| Gross public debt (% of GDP) | 65.2 | 63.7 | 63.1 |
| Current account balance (% of GDP) | 2.9 | 2.8 | 2.9 |
Growth set to recover, supported by domestic demand and exports
After a contraction in the first quarter of 2025, GDP remained almost unchanged in the first half of the year compared to the same period in 2024. While private consumption remained strong, prevailing uncertainty in the beginning of the year led to negative contributions from investments and net exports. In the second half of 2025, both private and public consumption are expected to continue expanding and investment growth is set to turn positive due to improved demand conditions and lower external uncertainty. Additional support for consumption is expected through the introduction of mandatory Christmas bonuses for all Slovenian employees. As conditions in the export markets improve, exports are anticipated to grow while imports growth is forecast to decrease as inventories are reduced. Overall, GDP is expected to grow by 1.0% in 2025.
GDP growth is forecast to accelerate to 2.4% in 2026 and to 2.6% in 2027. Private consumption is projected to continue expanding in both years, supported by employment growth and rising wages. Public investment is set to remain high thanks to the continued deployment of RRF-financed investment in 2026. Private investment is expected to recover as global uncertainty eases. Over the forecast horizon, exports are set to increase in line with export market demand despite some loss in competitiveness due to strong wage increases. Import growth is projected to ease somewhat in 2026, and the growth contribution from net exports is set to be broadly neutral over 2026-27.
The labour market remains tight
Employment is projected to decline by 0.2% in 2025, to then increase by 0.3% in 2026 and 2027, driven primarily by the continued inflow of foreign workers. The unemployment rate has reached a historic low and is projected to stand at 3.4% in 2025 and remain stable at around 3.5% in 2026 and 2027. Wages are forecast to increase by 7.9% in 2025, primarily driven by a 10% rise in the public sector due to the public sector wage reform, as well as the tight labour market conditions. Looking ahead, wages are forecast to increase by 5.7% in 2026 and by 5.4% in 2027. Consequently, unit labour cost increased by 6.7% in 2025, but are projected to decline markedly over 2026 and 2027.
Inflation set to remain high
After declining to 2.0% in 2024, inflation accelerated to 2.9% in 2025-Q3 and is expected to average 2.5% in 2025. This uptick is primarily due to higher food and services inflation and energy inflation, which are expected to persist over the forecast horizon, albeit with some moderation. Inflation is expected to average 2.4% in 2026 and 2.2% in 2027. Meanwhile, inflation excluding energy and food will increase to 2.9% in 2025, before easing to 2.5% in 2026 and 2.2% in 2027, driven by stronger service prices.
Higher expenditure pressures despite a downward debt trajectory
In 2025, the general government deficit is set to increase to 2.2% of GDP, reflecting a permanent rise in current expenditures and a cyclical slowdown in revenues. New revenue measures, including the long-term care contribution (0.4% of GDP in 2025 and 0.9% of GDP in 2026) and a higher CO₂ emissions tax (0.1% of GDP) will be offset by higher wage costs stemming from the implementation of the public sector wage system reform — which should help contain wage expenditure growth in the medium to long-run — and higher social transfers in-kind related to the rollout of the new long-term care system. Moreover, subsidies to support the green transition, particularly for the gradual phase-out of coal, will only be partly compensated by the withdrawal of the remaining temporary measures aimed at mitigating the impact of high energy prices. In addition, the introduction of a mandatory 14th salary for employees in both the public and private sectors—exempt from personal income tax and social contributions—is expected to increase expenditure on public sector compensation by 0.2% of GDP and reduce revenues by 0.2% of GDP in 2025, compared with the baseline.
In 2026, the general government deficit is projected to widen further to 2.3% of GDP, mostly due to the continued phasing in of the public sector wage and long-term care system reforms. The positive effects on revenues from stronger economic growth and the full-year impact of the long-term care contribution are expected to be outweighed by current expenditure pressures.
In 2027, the general government deficit is forecast to increase to 2.5% of GDP. On the expenditure side, current spending will continue to rise due to the ongoing phasing in of the public sector wage reform. The end of the RRF will not lead to a reduction in public investment, which is projected to remain at 5.3% of GDP thanks to the continued implementation of EU cohesion funds under the 2021–2027 Multiannual Financial Framework and strong nationally-financed investments, including defence investments.
The debt-to-GDP ratio is forecast to decrease gradually from 66.6% in 2024 to 65.1% in 2025, 63.7% in 2026 and 62.6% in 2027 thanks to a debt-decreasing interest-growth-rate differential and debt reducing stock-flow adjustment.
Source: European Commission. European Economic Forecast, Autumn 2025.
