Slovenia’s Economy Achieves Strongest Growth

The year-end improvement was driven primarily by stronger private consumption, which grew by 1.2% year-on-year — the highest reading since Q1 2023 — and by an acceleration in government spending, which increased by 4.8% (compared to 2.4% in Q3). However, fixed investment growth slightly moderated to 9.1%, down from 9.9% in the third quarter.

Externally, exports of goods and services declined by 2.3% year-on-year in Q4, a significant improvement from the sharper 8.6% contraction observed in Q3. Imports also fell but at a slower rate of 4.0% compared to a 10.6% decline in the previous quarter.

Looking forward, Slovenia’s economic momentum is expected to strengthen. The inflow of EU recovery funds, coupled with the normalization of industrial production following the severe floods of Q3 2023 — particularly in the automotive sector — is anticipated to support growth. Furthermore, easing inflationary pressures and a more accommodative monetary policy environment should boost domestic demand throughout 2024.

Commenting on the outlook, analysts from the Economist Intelligence Unit (EIU) noted:

"Despite localized disruptions in the automotive and tourism sectors due to the August 2023 floods, we expect the overall macroeconomic impact to remain limited, as increased construction and investment activity will largely offset the negative effects on trade, industry, and consumer sectors."