Slovenia’s GDP is forecast to increase by 1.9% in 2026 and by 2.3% in 2027, driven by strong domestic demand. Employment is expected to remain high, while the unemployment rate is set to stay low. Inflation is forecast to increase in 2026 due to the higher energy prices, remaining somewhat elevated over the forecast horizon. The government deficit is projected to widen, reaching 3.3% of GDP in 2026 and 3.5% in 2027. The debt-to-GDP ratio is projected to decrease from 65.7% in 2025 to 65.1% by 2027.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 1.1 | 1.9 | 2.3 |
| Inflation (%, yoy) | 2.5 | 3.5 | 2.5 |
| Unemployment (%) | 3.9 | 3.8 | 3.8 |
| General government balance (% of GDP) | -2.5 | -3.3 | -3.5 |
| Gross public debt (% of GDP) | 65.7 | 64.9 | 65.1 |
| Current account balance (% of GDP) | 3.7 | 2.4 | 2.3 |
Growth set to increase, supported by domestic demand and exports
Real GDP grew by 1.1% in 2025, driven by domestic demand. Private and public consumption expanded robustly, while strong investment growth was supported by non-residential construction and increased investment in machinery and equipment. In contrast, the construction of dwellings remained subdued. The contribution of net exports to GDP growth remained negative (-1.3 pps.), as goods exports declined while imports increased. Wages rose sharply by close to 8%, driven by public sector wage reform, while employment decreased.
GDP growth is forecast to accelerate to 1.9% in 2026 and 2.3% in 2027. Despite projected price increases, private consumption is expected to continue expanding in both years, supported by steady employment and continued wage increases. The minimum wage increased by 16% in January 2026 and public wages are also set to increase also strongly. The savings rate is expected to increase in 2026 reflecting declining consumer confidence due to the conflict in the Middle East. Public investment is expected to remain high in 2026 thanks to the continued deployment of RRF-financed investment. Despite increased global uncertainty and higher energy prices, private investment is also forecast to continue the strong momentum seen at the end of 2025, supported by solid credit growth and a rebound in housing construction. However, as competitiveness weakens – due to high wage increases not matched by productivity gains – and terms of trade worsen as a result of increased energy prices, the growth contribution from net exports is projected to remain negative over the forecast horizon.
Labour market remains tight
Employment contracted by 0.4% in 2025 but remains at historically high levels. It is projected to stagnate in 2026 and in 2027. The unemployment rate rose to 3.9% in 2025 and is projected to remain stable at 3.8% in 2026 and 2027. Nominal wages are forecast to increase by 6.5% in 2026, primarily driven by the continued impact of the public sector wage reform, the minimum wage hike, and continued tight labour supply. In 2027, wages are projected to increase by a further 5.6%.
Inflation set to remain high
Inflation rose to 2.5% in 2025, driven by higher food and services prices. It is projected to increase further, averaging 3.5% in 2026, due to rising global energy and food prices and continued pressure on food and service prices. In 2027, inflation is projected to moderate to around 2.5%, reflecting some easing in energy and food prices.
Higher expenditure pressures despite a downward debt trajectory
The general government deficit ratio increased significantly to 2.5% of GDP in 2025, reflecting a permanent rise in current expenditures, record-high public investment at 5.6% of GDP and a weaker-than-expected revenue growth.
In 2026, the general government deficit is set to widen further to 3.3% of GDP. Revenue will be negatively impacted by a reduction in energy-related levies of around 0.2% of GDP introduced to mitigate the impact of higher energy prices and a reduction in property income, which will be offset by the full-year impact of the long-term care contribution. On the expenditure side, current spending is set to rise, driven primarily by government intermediate consumption, social benefits and public wages. Public investment is projected to remain high at 5.5% of GDP, supported by RRF-funded projects. The Commission Spring 2026 forecast does not incorporate measures adopted by the National Assembly after the cut-off date which would have a total budgetary cost between 0.5% and 1.0% of GDP for 2026.
In 2027, the general government deficit is forecast to increase further to 3.5% of GDP. On the revenue side, the expiry of RRF grant receipts will reduce total government revenues. On the expenditure side, current expenditures will keep increasing. Despite the end of the RRF, public investment is projected to remain high at 5.1% of GDP supported by the continued implementation of EU cohesion funds and strong nationally-financed investment, including defence investments. The debt-to-GDP ratio is forecast to decline gradually from 65.7% in 2025 to 64.9% in 2026, supported by favourable nominal GDP growth and debt-reducing stock-flow adjustments, and then to increase to 65.1% in 2027 as general government deficit widens. The enactment of the additional measures mentioned above, which were adopted after the cut-off date, risks increasing the deficit and debt further in 2027 as most of these measures are not temporary.