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Sentiment indicators for the euro area suggest weak activity growth in the first quarter, amid very high uncertainty. In the first quarter, the value of the composite purchasing managers’ index (PMI) rose slightly above 50. The services PMI remained above 50 (the level indicating growth) and was similar to the previous quarter. Meanwhile, the manufacturing PMI edged up slightly in the first quarter, though it remained below 50 (a level indicating contraction). The economic sentiment indicator (ESI) for the euro area also rose slightly in the first quarter, driven primarily by increased confidence in industry and, to a lesser extent, in construction, though it remained unchanged year-on-year. The international environment continues to be marked by considerable uncertainty, stemming from the ongoing trade war, which is weighing on the global economy, and geopolitical tensions.

Short-term indicators suggest weak economic growth in Slovenia in January and February; month-on-month, activity rose mainly in trade sectors, while on a year-on-year basis, exports, trade turnover, and construction activity were higher. However, manufacturing output and turnover in market services were lower year-on-year. Economic sentiment continued to improve in March, with confidence indicators lower year-on-year only in services. Real exports and imports of goods, which have fluctuated significantly in recent months, declined month-on-month in February. However, both remained higher year-on-year in the first two months of 2025 (exports up 2.0% and imports up 1.2%). Manufacturing production, which had been gradually recovering since the end of the third quarter of last year, contracted in February (-1.8%, seasonally adjusted). On average, output in the first two months of 2025 was lower year-on-year. (-0.7%). Amid considerable uncertainty in the international environment, sentiment in manufacturing remains low. In January, real turnover in all trade sectors saw a sharp rebound, following a decrease in wholesale trade and retail sales of non-food products, as well as modest growth in sales of motor vehicles and retail sales of food products in the fourth quarter of last year. It was also higher compared to January 2024, with the most notable increase in the sales of motor vehicles. After rising in the fourth quarter of last year, real turnover in market services declined in January in most activities and was also lower year-on-year. Following a significant increase in November last year, construction activity declined slightly in December and January. However, due to the low base in January last year, activity was higher year-on-year this January, marking the first increase in a long time. Available indicators for January also suggest that household consumption was higher year-on-year. Economic sentiment improved further in March. Year-on-year, the confidence indicator in March was higher among consumers and in all activities except for services, where it was lower for the second consecutive month.

Employment figures remained broadly unchanged month-on-month in January, while the number of unemployed decreased slightly in March (both seasonally adjusted). Wage growth increased slightly in January year-on-year. The number of persons in employment, which had significantly declined at the end of last year due to an increase in retirements and the expiry of fixed-term contracts, remained largely unchanged in January. For the first time since 2020, employment in construction was lower year-on-year. It also remained lower year-on-year in manufacturing and administrative and support service activities. Employment increased in public service activities, particularly in healthcare and education. The number of unemployed persons declined slightly in March (seasonally adjusted), falling by 2.2% year-on-year, which is a slightly smaller decrease compared to previous months. The year-on-year nominal growth in the average gross wage was higher in January (6.9%) than at the end of last year, primarily due to stronger growth in the public sector as part of the wage system reform. In real terms, the average gross wage increased by 4.8% year-on-year in January – by 2.9% in the private sector and 8% in the public sector.

Year-on-year growth in consumer prices rose in March, returning to its level seen at the beginning of the year (2%). The rise in year-on-year inflation compared to February (by 0.4 p.p.) was mainly driven by higher electricity prices, following the expiry of the temporary partial reduction in electricity network charges. Their monthly increase (16.5%) was offset by the transition to the low season for network charge calculation (keeping the exemption from the RES and CHP contribution). Year-on-year price growth also strengthened slightly in food and non-alcoholic beverages (3.5%) and in semi-durable goods (2.2%). The growth in service prices (3.4%) also increased slightly. Compared to the first two months of this year, the year-on-year decline in the prices of durable goods (-0.8%) was slightly more pronounced. Year-on-year HICP inflation stood at 2.2% in March in both Slovenia and in the euro area. Slovenian industrial producer prices were higher year-on-year in February for the first time after more than a year of decline. In addition to a 0.4% monthly rise, this was also driven by a lower base. Prices increased year-on-year in the domestic market (0.2%) and in foreign markets (0.9%).

In the first two months of 2025, the consolidated general government budgetary accounts recorded a deficit of EUR 17.1 million. amid modest revenue growth, this was mainly due to a stronger increase in expenditure, driven by higher subsidy payments, the launch of the public sector wage reform, increased pension spending and the growth of certain other expenditures that had declined during the same period last year. Revenues were 5.8% higher year-on-year in the first two months. The main contributors to revenue growth were tax revenues – particularly corporate income tax, driven mainly by a higher tax rate – along with VAT revenues and, to a lesser extent, personal income tax revenues. Revenue growth from social contributions, which was significantly boosted last year due to the transformation of the complementary health contribution into a mandatory one, is lower this year but remains relatively strong, supported by continued growth in wages and employment. Total receipts from the EU budget were lower year-on-year. Expenditure in the first two months was 12.1% higher year-on-year. The main drivers of this increase were current transfers, particularly agricultural subsidies, which were low in the same period last year, wages and work-related income affected by the wage reform (introduced in January this year) and transfers to individuals and households, where the main contributions to growth came from pension and sickness benefit expenditures. Investment expenditure was higher year-on-year. Interest payments and payments to the EU budget and to reserves (budget fund allocations), which had decreased during the same period last year, also increased. 

The at-risk-of-poverty rate increased slightly between 2021 and 2024; while it remains below the EU average; certain vulnerable groups are significantly more exposed to the risk of poverty than the national average, and their risk is also above the EU average for comparable groups. Among Slovenia’s regions, the Obalno-kraška region has had a persistently high poverty risk since the COVID-19 pandemic. In 2024, the national at-risk-of-poverty rate was 13.2%, which is 1.5 p.p. higher than in 2021 and 0.5 p.p. higher than in 2023, although still lower than in most EU countries. According to available data, only five EU Member States had lower at-risk-of-poverty rates than in Slovenia (13.2%) in 2024: the Czech Republic (9.5%), Belgium (11.5%), Denmark (11.6%), the Netherlands (12.1%) and Finland (12.6%). In 2024 (based on 2023 income), around 276,000 people in Slovenia were at risk of poverty, with approximately 169,000 just above the at-risk-of-poverty threshold. Groups facing an above-average risk of poverty include older people (65+) and/or pensioners, people with low levels of education, single-person households, households with very low work intensity, and persons with disabilities. Their risk is also higher than the average risk of comparable groups in the EU. The COVID-19 pandemic and related containment measures, during the 2020–2022 period, which had the greatest impact on tourism, accommodation and food service activities, as well as transport, affected the Obalno-kraška region the most. Before the pandemic, this region was among those with the lowest at-risk-of-poverty rate in Slovenia. Despite some improvements over the last two years, the region still had the highest at-risk-of-poverty rate in the country in 2024.