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Successfully investing in Slovenia

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​ last updated on 10 October 2025 | reading time approx. 3 minutes

 

 

 

How do you assess the current economic situation in Slovenia?

Slovenia, with a GDP of around 70 billion US dollars, is one of the most developed economies in Central and Eastern Europe. The country has a well-diversified industrial base, strong export performance, and a high standard of living.

A GDP growth is projected to strengthen to 2.6 percent in 2025 and 2026, driven by a recovery in domestic and external demand. The domestic labour market in Slovenia remains tight, but there are signs of cooling, while inflation stood at 2.0 percent in December, up slightly on the previous month as expected.

Amid variation in the developments in different sectors, the economic situation in Slovenia remained uncertain in the final quarter of last year, albeit better than a year earlier. Performance in services and retail remained solid, driven by robust domestic consumption and tourism. 

Developments in industry were also relatively favourable, given the uncertainty in the international environment, while construction activity increased sharply in November after a few months of stagnation. By contrast the economic sentiment deteriorated slightly in the final quarter. 

The labour market remained tight at the end of the year, although there are signs of cooling. The situation remains favourable in services in particular, while the persons in employment in manufacturing is falling. Seasonal effects drove a rise in registered unemployment in December, and the surveyed unemployment rate also rose. The number of vacancies is gradually falling, but it is still higher than before the pandemic, despite the record level of the persons in employment. This is evidenced in the persistent tightness of the labour market, where wage growth remains robust.

Inflation strengthened at the end of 2024, as a result of rising energy prices and higher growth in prices of processed food. The state budget deficit amounted to 1.2 percent of GDP last year, approximately 1 percentage point less than the government forecast.

How would you describe the investment climate in Slovenia? Which sectors offer the largest potential?

Several factors make Slovenia an attractive location for foreign direct investment: modern infrastructure with access to important EU transportation corridors, a major port on the Adriatic Sea with access to the Mediterranean, a highly educated and professional workforce, proximity to Central European and Balkan.

Domestic consumption, driven by rising wages, social transfers, and a recovery in investment, will be a key driver of GDP growth this year. Government sector investment activity will strengthen, supported by funds from the Recovery and Resilience Plan and the Fund for the Reconstruction of Slovenia, created in response to the 2023 floods.

Goods export growth will be lower after last year’s high, in line with foreign demand, while services exports will accelerate. Uncertainty and weak recovery in trading partners will lead to cautious investment, especially in export-oriented sectors. Lower interest rates are expected to boost housing investment in the medium term. Government consumption growth will moderate in 2025, with post-flood reconstruction continuing to drive spending on both investment and goods and services.

What challenges do German companies face during their business ventures into Slovenia?

Slovenia is a great country in which to seek long term capital growth potential with relatively low risk and as we have just seen, it's still very affordable. Notably, the business friendly legislation, investment incentives, 19 percent corporate income tax rate and investment tax allowance. This mix allows various industries to thrive in Slovenia, with many of them having a large footprint in international markets. 

According to the Slovenian officials, in the first ten months of 2024, the value of exports with non-EU member countries increased by 38.3 percent and with EU Member States by 1.2 percent. Key trading countries for Slovenia (based on the total value of exports and imports shows that Switzerland ranked first, followed by Germany and then China. Slovenia’s neighbors Italy, Austria, Croatia and Hungary ranked 4th, 6th, 7th and 8th respectively, with India at 5th place.

In recent times German investors seem to be focusing especially on logistics, trying to profit from the country’s key position between Mediterranean and Central Europe. With a total value of investment at around 1.5 billion euros, Germany only ranks 4th. The number of investments is rising, however. According to the latest figures there are some 750 companies in German ownership operating in Slovenia. Together these companies employed around 50.000 people, 8 percent of the total workforce. As a survey published by the German Chamber of Commerce and Industry shows, these companies create 15 percent of the total revenues in Slovenia and 20 percent of Slovenian exports.

Germany's success in this area is the result of long-standing efforts. Slovenia is an important trade partner to Germany despite its small size. Its volume of trade with Slovenia is bigger than that with some much larger states like Greece, Ukraine or Indonesia. And there are numerous success stories among German investments in Slovenia due to a highly skilled work force and the compatibility of the two cultures.

Many mid-size German companies, like luxury mobile home producer Carthago, choose Slovenia as its production destination because of a skilled and relatively competitive work force. Another strong reason is the culture: work ethics, values and culture in Slovenia are much closer to theirs than in any other part of southeastern Europe - a legacy of being a part of the Austrian empire for almost a millennium. The German Slovenian trade and industry chamber, which publishes a survey among its members, also points out relatively good infrastructure and availability of quality local suppliers as some of Slovenia’s advantages. The latest survey shows a growing confidence and optimism among investors – yet also comes with a clear warning. Slovenia must speed up political and administrative reforms in order to become truly attractive to foreign capital, not only Germany.

Does the war in Ukraine have effects on Slovenia’s economy and investment climate?

The economic outlook for Slovenia has deteriorated because of the war in Ukraine but the economy has proven more resilient than most peers among the EU member states in Central and Eastern Europe (CEE). 

Following a strong post-Covid-19 rebound with +8.4 percent real GDP growth in 2021, economic activity began to cool in the second half of 2022 amid elevated inflation, rising interest rates, softening external demand and declining business confidence. However, a recession was avoided. Full-year growth came in at +2.7 percent in 2022 and +2.1 percent in 2023, supported by a strong increase in fixed investment and net exports. 

Solid tourism activity kept real exports almost stable while real imports plunged, reflecting weak domestic consumption and declining inventories. Growth remained weak in 2024 but the structure changed, with domestic consumption and restocking becoming the main drivers, while the corresponding rebound in imports turned the contribution of net trade to overall growth slightly negative. 

Looking ahead, growth is forecast to pick up to an annual average of around +2.5 percent in 2025-2026 on the back of a continued recovery of domestic consumption and investment activity, supported by EU funds.

Are there any local differences in the implementation of applicable laws? If so, how does this affect businesses?

Potential investors in Slovenia still face significant challenges, including a lack of transparency in economic and commercial decision making, time consuming bureaucratic procedures, opaque public tender processes and heavy tax and regulatory burdens. 

Slovenia is a state governed by the rule of law and a social state. The rule of law is based on the rules laid down by the Constitution and Acts and provides for the assessment of concrete cases by independent courts.​

In your opinion, how will Slovenia develop?

Following the pandemic and energy crisis, Slovenia has maintained economic stability. It has successfully curbed inflation, improved public finances, and kept unemployment at historically low levels. According to the public information, the industry with the highest number of companies registered is Services (69,176 companies in total), followed by Construction (10,563) and Wholesale Trade (10,287).

The business environment for corporates in Slovenia is strong. The World Bank’s annual Worldwide Governance Indicators surveys suggest that the regulatory and legal frameworks are business friendly and the level of corruption is low. 

The Heritage Foundation’s Index of Economic Freedom survey 2024 assigns the country rank 43 out of some 180 economies (up from rank 48 in 2021), reflecting strong scores with regard to property rights, judicial effectiveness, trade freedom, investment freedom and business freedom. However, weaknesses remain with regard to the tax burden and financial freedom. 

Overall systemic political risk is low. Slovenia is a well-established democracy and has good international relations, reflected in its EU, OECD and NATO membership. Broad policy continuity can be expected after national elections. Slovenia’s sovereign creditworthiness is not at risk as all major political parties support fiscal discipline. Lastly, Eurozone membership provides for moderate transfer and convertibility risk in Slovenia.
According to the European Commission, GDP growth is forecast to accelerate to 2.5 percent in 2025 and 2.6 percent in 2026 (from 1.4 percent in 2024). Investment is set to accelerate in 2025- 2026 due to the deployment of EU Recovery and Resilience Funds. Investment in machinery and equipment is also expected to increase due to improving financial conditions and higher exports demand. At the same time, imports are set to pick up, in line with higher consumption and investment.

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