OECD downgrades economic outlook for Slovenia
The Organisation for Economic Co-operation and Development (OECD) has downgraded its economic outlook for Slovenia compared to its May forecast, from 2.3% to 1.1% for 2024 and from 2.7% to 2.6% for 2025. In 2026, Slovenia's GDP is expected to expand by 2.6%, CE Report quotes STA.
The downgrade reflects a broader trend of economic uncertainty in Europe, driven by a combination of slowing global demand, inflationary pressures, and ongoing geopolitical tensions. The OECD cites weakening export markets and cautious consumer spending as key factors behind Slovenia's lower growth projections for 2024.
Inflation, while expected to moderate in the coming years, continues to weigh on real incomes and purchasing power. Slovenia's inflation rate is projected to decrease from its current levels to 3.1% in 2024 and further to 2.2% in 2025, aligning closer to the European Central Bank's target.
The OECD emphasized the importance of maintaining fiscal discipline while supporting economic recovery through targeted investments, particularly in green energy and digital transformation. Public debt, which has risen due to pandemic-related spending, is expected to stabilize but remains a challenge for long-term fiscal sustainability.
The report also highlights structural challenges that Slovenia needs to address to sustain growth. These include improving labor market efficiency, increasing productivity, and addressing demographic pressures such as an aging population. Efforts to upskill the workforce and attract foreign investment will be crucial for enhancing competitiveness.
Despite the short-term downgrade, Slovenia's economy remains resilient in several areas. Strong fundamentals, including a diversified industrial base and robust public institutions, provide a solid foundation for future growth. However, achieving sustainable expansion will require navigating global headwinds and implementing reforms to bolster economic resilience.
OECD Secretary-General Mathias Cormann noted, “Slovenia, like many other nations, faces a complex economic environment. However, by focusing on innovation, sustainability, and inclusivity, it has the opportunity to emerge stronger in the medium term.”
The Slovenian government has reiterated its commitment to addressing the challenges outlined in the report. A new set of policy measures, focusing on innovation, public sector efficiency, and energy independence, is expected to be unveiled early next year.
