Slovenia returned to growth in Q2 2025 after a contraction in the first quarter. According to seasonally and calendar adjusted figures from the Statistical Office of the Republic of Slovenia (SURS), GDP rose by 0.7% compared to Q1 and by 0.8% year-on-year. This is the highest quarterly GDP growth in the euro area, along with Spain, and well above the euro area average of 0.1%.
Key drivers of growth in Slovenia in Q2
– Household consumption up by 3.6%Private consumption was the main driver of growth. Purchases increased in all product groups, especially services (+4.5%); durable goods (+3.3%); semi-durable goods (+3.7%); non-durable goods (+1.6%).Government final consumption declined slightly by 0.5%, mainly due to lower collective spending, while spending on individual services increased by 1.8%.
– Investment increased by 7.5%, mainly due to inventory accumulation. Although gross fixed capital formation fell slightly (-0.2%), investment in buildings and structures rose by 0.5% – the first increase after four consecutive quarters of decline – led by non-residential construction. Investment in residential structures fell by 10.2%. Investment in transportation equipment fell by 6.7%, while investment in other equipment rose by 0.6%.
– Mixed tradeExports fell by 0.8% (goods -1.4%, services +1.6%), while imports rose by 2.7% (goods +2.9%, services +1.8%).
– Value added rose by 0.6% in most sectors, with the strongest contributions coming from public administration, education, health and social work (+2.2%), construction (+3.9%) and professional, scientific and technical activities (+2.7%). Manufacturing contracted again (-1.9%), as did finance and insurance (-1.2%).
– Employment continues to declineTotal employment was 1,097,000 persons, down 0.4% from Q2 2014, the third consecutive quarterly decline. The largest declines were in manufacturing and construction; the strongest job gains were in public services.
Euro area perspective:
Slovenia and Spain recorded the strongest quarterly GDP growth in the euro area. Ireland recorded the largest quarterly decline. Slovenia’s GDP grew by 0.7% (unadjusted) compared to the euro area average of 1.4%. Ireland recorded the highest annual growth (+16.2%), while Austria had the lowest (+0.1%).
Outlook for 2025:
The Bank of Slovenia expects overall GDP growth of 1.3% this year, supported by domestic demand and an expected gradual improvement in foreign trade. However, downside risks remain elevated.
Structural issues cannot be ignored:
Despite encouraging short-term numbers, Slovenia continues to face significant structural challenges-including pressures on the health care system, regional development disparities, aging infrastructure, and persistent rigidities in public administration. As in many developed countries, these issues require serious and comprehensive reforms. Cosmetic adjustments will not deliver long-term competitiveness or resilience.
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