Slovenia

OECD’s periodic surveys of the Slovenian economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

Études économiques consacrées périodiquement par l'OCDE à l’économie de la Slovénie. Chaque étude analyse les grands enjeux auxquels le pays fait face. Elle examine les perspectives à court terme et présente des recommandations détaillées à l’intention des décideurs politiques. Des chapitres thématiques analysent des enjeux spécifiques. Les tableaux et graphiques contiennent un large éventail de données statistiques.

Slovenia's current housing challenges are characterised by strong demand and inadequate supply, exacerbated by rising construction and financing costs. High ownership rates mask the affordability challenge for younger cohorts or those who want to move amid limited rental markets and insufficient residential construction activity. This chapter proposes a range of policy options to make housing more efficient, inclusive and sustainable. Streamlining spatial planning and permitting systems would foster housing supply responsiveness. Levelling the playing field in rental markets and overhauling real estate taxation can boost market efficiency. Enhancing access to mortgage financing and improving framework conditions for the provision of social housing would expand housing options for households. Finally, housing policies should aim at accelerating the transition to a net-zero economy by aligning energy taxation more closely with the carbon content of the source, strengthening the support programmes for renovation works and improving framework conditions for the deployment of district heating and electrification.

Although female labour market participation is above average in Slovenia, a gender wage gap persists, reflecting sectoral differences in gender outcomes. Adjustments in the tax and benefit system are needed to reduce disincentives to enter employment, notably for second earners and single parents, who are often women. Policies reducing gender differences in sectoral activity would encourage better sharing of household and caring responsibilities. At the same time, systematic reporting on pay transparency could help reduce the gender wage gap and should be swiftly transposed into domestic law. Policies reducing the gender pension gap can help reduce the risk of old-age poverty that mainly affects women.

Slovenia has been hit by multiple external shocks, which has put an end to a strong rebound of economic growth and improving public finances following the Covid-19 pandemic. Inflation rose to unprecedented levels, initially triggered by rising commodity prices and supply-chain bottlenecks, accompanied by a strong domestic policy stimulus that likely overheated the economy and later exacerbated by the fallout from Russia's war of aggression against Ukraine (Figure 1.1). As the interest rates in the euro area increased sharply to curb accelerating inflation, real incomes of households stagnated, borrowing costs spiked and business confidence weakened. Domestic demand softened while foreign demand for Slovenian exports abated on the back of the general slowdown in the euro area. At the same time, the labour market has remained resilient and firms in many sectors report persistent labour shortages. The supply-side constraints will also complicate reconstruction efforts after the devastating floods that hit last summer.

A significant acceleration of emission reductions is needed to achieve net zero emissions by 2050. This entails greater harmonisation of carbon prices, before raising them gradually, and the phase out of environmentally harmful subsidies in agriculture, energy and transportation. Such efforts should be complemented by additional measures to shift to clean energy, notably a faster deployment of renewables. Also, stronger adaptation to climate risks is needed.

The economy proved resilient to external shocks following Russia’s war of aggression against Ukraine, but the post-pandemic recovery has slowed. Inflation has fallen but remains elevated. Improving fiscal sustainability, amid ongoing reconstruction after the devastating floods of 2023, is a key challenge.

The economy has been resilient in the face of external shocks, amid elevated risks. The labour market remains tight, with labour shortages supporting strong wage growth. Inflation has started to fall, but services price growth remains elevated. Borrowing costs for households and firms increased, but recent macroprudential measures limit financial stability risks. Fiscal policy needs to restore fiscal buffers and continue addressing long-term challenges, notably related to population ageing. To ensure fiscal sustainability, pension reform should continue to increase the effective retirement age and link it to life expectancy. Lifting barriers in retail trade and restrictions on professional services would help boost productivity growth. Efforts to fight corruption need to continue to address remaining risks in public procurement and improve public spending efficiency.

This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.

Slovenia's current housing challenges are characterised by strong demand and inadequate supply, exacerbated by rising construction and financing costs. High ownership rates mask the affordability challenge for younger cohorts or those who want to move amid limited rental markets and insufficient residential construction activity. This paper proposes a range of policy options to make housing more efficient, inclusive and sustainable. Streamlining spatial planning and permitting systems would foster housing supply responsiveness. Levelling the playing field in rental markets and overhauling real estate taxation can boost market efficiency. Enhancing access to mortgage financing and improving framework conditions for the provision of social housing would expand housing options for households. Finally, housing policies should aim at accelerating the transition to a net-zero economy by aligning energy taxation more closely with the carbon content of the source, strengthening the support programmes for renovation works and improving framework conditions for the deployment of district heating and electrification.

Since the publication of the latest Action 14 Peer Review Report Slovenia has made efforts to make the following two tax Treaties in line with the Action 14 Minimum Standard: tax treaty between Slovenia and Thailand (entry into force of the MLI for the tax treaty) and tax treaty between Slovenia and Sweden (entry into force of the new tax treaty replacing the existing tax treaty). Furthermore, additional action is currently ongoing to make the tax treaty between Slovenia and Switzerland (signature of the protocol to the tax treaty on 30 May 2023) in line with the Action 14 Minimum Standard.

This country profile features selected environmental indicators from the OECD Core Set, building on harmonised datasets available on OECD.stat. The indicators reflect major environmental issues, including climate, air quality, freshwater resources, waste and the circular economy, and biodiversity. Differences with national data sources can occur due to delays in data treatment and publication, or due to different national definitions and measurement methods. The OECD is working with countries and other international organisations to further improve the indicators and the underlying data.

In addition to the Public Procurement Act (2015) the Government of the Republic of Slovenia adopted a Decree on GPP in 2012, with the aim of reducing emissions and making the public sector a role model for society and the private sector. The GPP Decree was revised in 2018 (Uradni list RS, št. 51/17 z dne 19. 9. 2017) in order to promote markets for green products and support the country’s transition to a circular economy. The last update of the GPP Decree was in 2021 (Uradni list RS, št. 121/2021 from 23. 7. 2021) with the additional two green subjects. In particular, the GPP Decree provides for the obligation of contracting authorities to integrate environmental considerations for different procurement categories (e.g. products, services, and works).

Public sector remuneration systems are shaped by an intricate interaction of administrative culture, economic conditions, and political systems. This paper discusses critical considerations to bear in mind when designing, planning and implementing reforms of public service wage systems. It explores key concepts such as job evaluation, pay structures, performance-related pay, market analysis for competitive pay levels and wage bill planning. It provides guidance on the process of reforming public sector salary systems to enhance their competitiveness, equity, transparency and affordability. The paper offers insights drawn from the reform efforts of several EU Member States and SIGMA partners in the Western Balkans, Moldova and Ukraine, presenting real-life examples and updated guidelines for effective, sustainable salary system changes. The primary focus is on reforms of wage systems within central government administrations, acknowledging the complexity arising from diverse classifications of civil service and public employees, and the varying scope and structure of salary systems. This paper serves as a practical guide, presenting options along with their advantages and disadvantages to aid policymakers in aligning reforms with their national public administration context and strategies.

Slovenia’s development co-operation focuses on its near neighbourhood in the Western Balkans and Eastern Europe, including through its integration into the European Union (EU). Over half of Slovenia’s official development assistance (ODA) is delivered bilaterally, and the European Union receives almost all of its multilateral ODA. Slovenia’s total ODA (USD 162.9 million, preliminary data) decreased in 2023, representing 0.24% of gross national income (GNI).

GDP growth is projected to pick up to 2.3% in 2024 and 2.7% in 2025, with a recovery in domestic and external demand. Private consumption will be supported by a tight labour market and increasing real incomes as inflationary pressures slowly recede. Government spending on reconstruction following the devastating floods in 2023 as well as the inflow of EU funds will sustain investment growth.

La croissance du PIB devrait s’accélérer pour atteindre 2.3 % en 2024 et 2.7 % en 2025, sur fond de redressement de la demande intérieure et extérieure. Les tensions sur le marché du travail et la hausse des revenus réels accompagnant le lent reflux de l’inflation favoriseront la consommation privée. Les dépenses publiques consacrées à la reconstruction dans le sillage des inondations dévastatrices de 2023 ainsi que l’afflux de fonds en provenance de l’UE doperont l’investissement.