Slovenia - Market OverviewSlovenia - Market Overview
Slovenia is a small transition economy with a population of only two million, strategically located at the “gateway” to the Western Balkans. It was considered a star performer after attaining independence in 1991: it registered dramatic gains in per capita and aggregate wealth, established a stable and well-functioning democracy, and raised the standard of living for Slovenians to a level on par with Western European economies. Belying its size, Slovenia has used its savvy, determination, and unique geography to its advantage, becoming a strong regional and international player. Slovenia joined the North Atlantic Treaty Organization (NATO) in March 2004, the European Union in May 2004, and the Eurozone in January 2007, held the EU Presidency during the first half of 2008 and joined the Organization for Economic Cooperation and Development Europe (OECD) in 2010.
After years of economic growth, the Slovenian economy was hit hard by the global economic crisis of 2008. The crisis exposed systemic weaknesses, and significant reforms are needed to return the economy to health. In 2016, Slovenia’s GDP per capita was USD 21,326 with 8.0 standardized rate of unemployment. Slovenia's economy is highly dependent on foreign trade. More than 75 percent of Slovenia's trade is with the EU, focused primarily on the German, Italian, and Austrian markets. Slovenia also has extensive trade ties with the Western Balkans and Eastern Europe. According to official data, U.S. foreign direct investment in Slovenia stood at USD 38.7 million in 2015, or 0.3 percent of total inward FDI. However, this amount does not take into account significant investments by U.S. firms not listed by the Bank of Slovenia as U.S. in origin, as U.S. funds are often routed through a third country. The share of U.S. FDI in Slovenia, as calculated by the U.S. Embassy, is approximately 5 percent of total inward FDI.
Between 2004 and 2008, Slovenia generally enjoyed healthy growth figures, averaging 5 percent annual GDP growth. However, during the global financial crisis GDP endured successive years of contraction. Led by recovering exports, the Slovenia economy started slowly to rebound in the second half of 2010, but the growth slowed again in 2011, and Slovenia entered into recession again in 2012. The economy rebounded with 2.6 percent growth in 2014, 2.9 percent in 2015, and 2.5 percent in 2016. These rates are among the highest in the Eurozone. Authorities predict 3.6 percent growth in 2017 and 3.1 percent for 2018.
The crisis has exposed many of Slovenia’s underlying structural problems, especially in the financial services sector. Key reforms, such as privatization, openness to foreign investment, increased transparency in public procurement, pension reform, and business and investor-friendly changes to Slovenia’s labor and taxation code would support greater competiveness in the economy and increase opportunities for trade and investment. Slovenia has taken positive steps, but there are still many challenges ahead, and the pace of the reforms is too slow.
Slovenia Trade Development and Promotion