Slovenia’s GDP grew by 1.6% in 2024, while Romania’s economy expanded at a more modest rate of 0.9% YoY. As Slovenia remains heavily reliant on external trade, ongoing global trade wars could negatively impact its economic output, even if indirectly. Meanwhile, Romania faces significant internal challenges, with the newly adopted 2025 state budget aiming to address fiscal imbalances and inflationary pressures.
Slovenia
In the fourth quarter of 2024, Slovenia’s GDP grew by 1.5% compared to the same period in 2023. Domestic expenditure increased by 0.1% in the last quarter, with final consumption expenditure rising by 2.4% YoY, while fixed capital formation declined by 7.6% YoY. This marked the third consecutive quarter of declining fixed capital, with investments in machinery and equipment down by 7.1% and investments in buildings and structures falling by 4.9% YoY. On the other hand, household consumption expenditure rose by 1.2%, with spending on services seeing the highest increase at 2.1% YoY. Regarding external trade, exports grew by 3.9%, and imports increased by 2.3% YoY in Q4 2024, with the external trade balance contributing 1.3 p.p. to GDP growth.
Over the full year, Slovenia’s GDP expanded by 1.6%, driven by a 3.5% increase in final consumption expenditure, though gross capital formation declined by 2.4%. The external trade balance, however, deteriorated by 0.4%, as imports (+3.9%) outpaced exports (+3.2%), leading to a negative GDP contribution of 0.4 p.p.
Slovenian GDP YoY growth rates (Q1 2015 – Q4 2024, %)
Source: SURS, InterCapital Research
By sector, the highest value-added growth in 2024 was recorded in Information and Communication, which increased by 4.8% YoY. This was followed by Manufacturing (+3.1%), Other Service Activities (+2.7%) and Mining, Quarrying, Manufacturing, Electricity, Water Supply and Waste Management (+2.6%). Conversely, Agriculture, Forestry and Fishing (-3.5%) and Construction (-1.4%) posted declines, negatively impacting GDP.
Slovenia’s economy remains heavily reliant on external trade, with domestic consumption growing at a relatively modest pace, especially compared to Croatia. However, the ongoing global trade war – escalating since Trump’s presidency – could pose risks to Slovenia’s export-driven economy. Even if Slovenian exporters are primarily focused on European markets, new tariffs on EU exports could indirectly harm the country’s economic outlook by weakening the broader European economy.
Romania
On the eastern side of the Balkan peninsula, Romania’s GDP recorded an 0.8% QoQ increase in Q4 2024. Compared to the same quarter in 2023, GDP rose by 0.7%, based on seasonally adjusted data. For the full year, Romania’s GDP expanded by 0.9% YoY in 2024.
Seasonally adjusted quarterly YoY GDP development (2010 – 2024, %)
Source: Romanian Institute of Statistics, InterCapital Research
According to the newly adopted 2025 budget plan, economic growth is projected to reach 2.5%, with annual inflation expected to decline to 4.4% and the budget deficit targeted to shrink to 7% of GDP. While this growth forecast appears achievable, it will depend on the success of government policies in rationalizing expenditures, the impact of expected tax hikes, and the development of household consumption amid inflationary pressures. Wage growth, though slowing, remains among the highest in the EU and continues to influence consumption trends. Additionally, interest rate cuts remain on hold due to ongoing inflationary and fiscal challenges.
Overall, Romania’s GDP growth is expected to outpace developed EU economies but remain below regional peers in SEE and CEE. This reflects both internal uncertainties, including political instability, and external geopolitical risks, such as the war in neighbouring Ukraine, Middle East tensions and global trade conflicts.
