Slovenia’s GDP grew by 1.1% in 2025, with momentum building throughout the year and culminating in a 2.0% YoY expansion in Q4 2025 – the strongest quarterly reading since Q1 2024. While domestic demand provided a clear boost, the external trade balance remained a significant drag.

In the fourth quarter of 2025, Slovenia’s GDP grew by 2.0% YoY, accelerating slightly from the revised 1.9% in Q3. On a seasonally and calendar-adjusted basis, GDP increased 0.4% QoQ, moderating from the strong 0.9% QoQ growth recorded in Q3 but remaining firmly in expansion territory. The Q4 result signals a meaningful normalization of domestic demand after a volatile first half of the year.

On the demand side, household consumption expenditure rose by 3.0% YoY in Q4, a sharp acceleration from 1.3% in Q3, and represented the primary growth driver for the quarter. Services consumption remained particularly resilient, supported by solid labour market income dynamics. General government expenditure also strengthened materially, expanding 3.8% YoY, compared to 1.2% in Q3.

The late-2025 introduction of statutory Christmas bonuses for public and private sector employees likely provided additional short-term support to disposable incomes and private spending, although the precise macro impact is far more complex and should spill over other GDP components as well.

Gross capital formation increased by 13.2% YoY in Q4, broadly in line with the 13.1% growth in the previous quarter, marking two consecutive quarters of strong expansion. This growth was primarily driven by investment in buildings and structures, particularly non-residential construction. Investment in machinery and equipment also rebounded following earlier weakness. This represents a clear turnaround from the second half of 2024, when gross fixed capital formation contracted for three consecutive quarters amid high financing costs, subdued industrial demand, and softer real estate activity.

On the other hand, net exports detracted 3.1 p.p. from Q4 GDP growth. Exports of goods and services rose modestly by 0.5% YoY, an improvement from the 0.4% contraction in Q3, but still subdued. Meanwhile, imports surged 4.8% YoY, driven by a 5.4% rise in goods imports and a 1.6% increase in services imports.

The import acceleration reflects both strong domestic demand and likely inventory rebuilding by firms following a period of elevated global trade uncertainty earlier in the year. However, the imbalance underscores ongoing external headwinds, particularly in key European export markets.

Slovenia remains a highly open economy, with exports of goods and services amounting to roughly 81% of GDP in 2024. This structural openness amplifies sensitivity to shifts in European industrial demand and global trade conditions. While direct exposure to the US remains limited, broader uncertainty surrounding global trade policy continues to pose downside risks for export-oriented sectors.

Slovenian GDP YoY growth rates (Q1 2015 – Q4 2025, %)

Source: SURS, InterCapital Research

For the full year, Slovenia’s GDP expanded 1.1% in 2025, slowing from 1.6% in 2024, but the annual result masks significant quarterly divergence. Activity weakened in Q1 amid elevated global trade uncertainty, higher input costs, and fragile export demand, followed by gradually stabilizing growth in Q2, Q3 and Q4.

Looking ahead, the European Commission projects Slovenia’s GDP to expand by approximately 2.5% annually in 2026-2027, supported by continued consumption growth, improving private investment dynamics, EU-funded public investment (including RRF disbursements), and a gradual recovery in export market conditions.

On the fiscal side, the general government deficit is projected at around 2.2% of GDP in 2025, reflecting higher current expenditures linked to structural reforms and social spending measures, also affected by the upcoming parliamentary elections. Nevertheless, the public debt ratio is expected to continue declining over the medium term, falling from 66.6% of GDP in 2024 toward approximately 63% by 2027.

Overall, Slovenia enters 2026 with improving domestic momentum but is still exposed to the broader European industrial cycle. Sustained acceleration will depend on a durable recovery in external demand and a continued normalization of investment conditions.

For a more detailed analysis of macroeconomic developments in Slovenia and other selected CEE markets, refer to our latest IC Macro Outlook, prepared by our Proprietary Trading team.