Republic of Slovenia: 2025 Article IV Consultation-Press Release; and Staff Report

The 2025 Article IV Consultation discusses that Slovenia has shown resilience in face of multiple shocks. Improving fiscal balances in 2021–2024 reversed a significant increase in public debt incurred during the pandemic and helped build fiscal buffers, while high scores on social indicators were preserved. Slovenia’s banking system appears healthy. The authorities have also embarked on important pension, long-term care, and health sector reforms to address challenges from population aging. Real gross domestic product contracted in the first quarter of 2025, as investment and exports fell amid weak external demand. Fiscal consolidation is needed to reduce public debt and preserve the country’s ability to respond to shocks. A gradual, growth-friendly fiscal consolidation would place the debt ratio firmly on a downward path. Fiscal reforms should continue. Implementing the 2025 pension reform is the linchpin to public pension sustainability. If demographic pressures were to intensify, further measures might be needed. Boosting Slovenia’s long-term growth requires comprehensive structural reforms focused on enhancing investment and productivity.