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Slovenia's robust economy


THE RIGHT INGREDIENTS FOR SUCCESS
www.slovenia.info / Photo: Nejc Fon
Success factors: | Macroeconomic Overview | Export driven economy | No restrictions for FDI | Hot topics | Related links
Slovenia is an export oriented country with a large share of industry and a sustained growth rate in the past with optimistic forecasts for the next years. Slovenia encourages foreign investment to exploy the possibilities for their projects.

Slovenia is one of the few countries with 100% macroeconomic stability (World Economic Forum's Global Competitiveness Index 2019), ensuring low-risk environment to investors. What is more, the World Bank’s Doing Business 2020 indicators rank Slovenia in 37th place among 190 world economies, highlighting Slovenia’s commitment to provide stimulating business conditions. The economy is diversified and well immersed into the European production chain.

DECISIVE SUCCESS FACTORS

  • Strong and balanced economic growth with a solid outlook
  • Diversified strong industries with competitive export
  • Improved fiscal position and business environment
  • Profitable banking sector
  • Embedded R&D culture
  • Competitive tax regime

THE BIG PICTURE - MACROECONOMIC OVERVIEW

Slovenia’s economy has been stable having a sustained growth rate in the past and optimistic forecasts for the years to come, low inflation, a current account surplus, and a fiscal surplus, as well as declining sovereign debt.

Main macroeconomic indicators

2019 2020 2021 2022 2023 forecast 2024 forecast
GDP real growth rate (%) 3.5 -4.3 8.2 5.4 1.8 2.5
GDP in mil. EUR 48,533 47,021 52,208 58,989 64,723 68,896
GDP per capita, in EUR 23,233 22,361 24,770 27,937 30,584 32,482
External balance of goods and services as a % of GDP 8.7 9.3 6.4 1.7 2.8 3.3
Rate of unemployment by ILO in % 4.5 5.0 4.7 4.2 4.0 3.8
Gross wage per employee; real growth rate 2.7 5.9 4.1 -5.5 1.1 1.8
Labour productivity (% of GDP per employee) 1.0 -3.7 6.8 2.9 0.8 1.8
Gross fixed capital formation as a % of GDP 19.6 18.9 20.3 22.0 22.1 22.9
Average exchange rate USD/EUR 1.120 1.141 1.184 1.054 1.087 1.087
Inflation (year average) 1.6 -0.1 1.9 8.8 7.1 4.2
Source - Institute of Macroeconomic Analysis and Development, 2023

Services provide most of the total value added, but what sets Slovenia apart is the large share of industry: with more than 28% share of the total value added, it is the third most industrialised EU member state. Industry also accounts for 80% of private investment in R&D.

Breakdown of economic activity by sector, 2021

Agriculture Industry Services
Value added (in % of GDP) 1.7 28.5 57.7
Value added (annual % change) -9.9 9.4 7.1
Employment by sector (in % of total employment) - data for 2019 4.3 34.1 61.6
Source - World Bank, 2023

The agricultural sector

The agricultural sector: Farmed agricultural area constitutes 30.6% of Slovenia’s total area, with 4.8% of farming dedicated to organic production, with another 5.4% in the system of control of organic production. Forestry also represents a significant part of the economy: 58% of Slovenis’s land is forested, annually contributing EUR 250 million to the economy in production value.

The industrial sector

The industrial sector: Since the 1980s, the mechanical industries (automobile, tool machines) and the high value-added industries (electronics, pharmaceuticals, and chemicals) have gone through a significant development, remaining one of the major contributors to the economy and attracting many foreign companies such as Renault, Bosch, Novartis amongst others.

The services sector

The services sector remains the key part of the Slovenian economy, showing a strong growth pattern over the last ten years, especially in the information and communications technologies (ICT), financial and commercial services, and retail businesses. The tourism sector has also been very dynamic, experiencing a period of accelerated growth prior to the Covid 19 pandemic (6.2 million tourists in 2019, up 5% YOY).


BEYOND BORDERS - EXPORT DRIVEN ECONOMY

Slovenia’s focus is on exports, representing a large chunk of its economy. In 2022, Slovenian exports of goods amounted to EUR 42.6 billion while export of services reached EUR 11 billion – a combined total of EUR 53.7 billion that is approximately 91 % of the country’s GDP.

Top 10 export products, 2022

Source: Statistical Office of the Republic of Slovenia, 2023

Export by country in € million, 2022

MARKET Goods in € million Services in € million Total in € million
EU-27 32,477 8,297 40,774
Germany 7,590 1,692 9,282
Italy 5,515 1,035 6,550
Austria 4,491 688 5,179
Croatia 3,426 1,473 4,899
France 1,762 367 2,129
Hungary 1,468 294 1,762
Poland 1,324 166 1,490
SOUTH-EASTERN EUROPE 3,070 497 3,567
Serbia 1,331 283 1,614
Bosnia & Herzegovina 903 86 989
Northern Macedonia 256 37 293
OTHER COUNTRIES 7,064 2,248 9,312
Switzerland 1,188 38 1,226
USA 885 335 1,220
Russian Federation 624 821 1,445
United Kingdom 728 292 1,020
TOTAL 42,611 11,042 53,653
Source - Bank of Slovenia, 2023

OPEN FOR BUSINESS - FOREIGN DIRECT INVESTMENT

Slovenia encourages foreign investment and does not discriminate between Slovenian and foreign investors.

Keen to attract new investment, the Slovenian government has introduced a number of incentives to support investors. Foreign companies making direct investments and meet certain criteria may be eligible for financial assistance in the form of grants. For more information on financial in scroll down or just contact us.  

Foreign investors can invest in most types of business undertakings. Repatriation of profit and capital is unlimited providing due taxes have been settled with the Slovenian Tax Administration.

Slovenia is one of the least restrictive countries among OECD members, along with Portugal, Czechia and Luxembourg (OECD, FDI Regulatory Restrictiveness Index Database 2022).

FDI Regulatory Restrictiveness Index, 2020

Source: OECD, 2022

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