Slovenia: Growth momentum to strengthen in 2026

Slovenia heads into 2026 with signs that its economic momentum is finally picking up after a rather subdued performance in 2025. The latest GDP data for the third quarter of 2025 shows a noticeable improvement: output grew by 1.7% y/y, a marked acceleration compared to the very weak first half of the year. The underlying story is one of domestic demand gradually reasserting itself as the backbone of economic activity. This pattern is expected to persist into early 2026.

Inflation dynamics have been somewhat uneven during 2025. After averaging around 2% in the first half of the year, inflation surged temporarily to 3.1% in October. This spike was largely driven by the expiration of earlier government energy support measures and the introduction of a new electricity pricing system. By November, however, inflation had eased back to 2.3%. Going into 2026, inflation is expected to hover slightly above 2%, as rising service prices — themselves a consequence of ongoing wage growth and tight labor market conditions — continue to exert upward pressure.

Slovenia’s fiscal position remains broadly stable. After recording a notably low deficit of 0.9% of GDP in 2024, the government now anticipates somewhat wider deficits in 2025 and 2026 — around 1.9% and 2.9% of GDP, respectively. This widening is tied to a combination of slower revenue growth and the cost of ongoing public sector reforms, including changes to wages, pensions, healthcare, and long-term care, along with rising defense spending. Even so, the Ministry of Finance insists that fiscal discipline will be maintained, with the deficit kept under the 3% threshold and public debt kept on a downward trajectory.

Financial markets have reflected this stability. After a relatively volatile period earlier in 2025, the yield on Slovenia’s 10-year government bond has settled at around 3%, and spreads relative to key benchmarks have narrowed to roughly 30 basis points.

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