{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with the Republic of Slovenia",
  "publication": "IMF News, January 26, 2026",
  "sourceUrl": "https://www.imf.org/en/news/articles/2026/01/23/pr-26016-slovenia-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation with the Republic of Slovenia and considered and endorsed the staff appraisal without a meeting on a lapse of time basis.",
  "publishDate": "2026-01-26",
  "sections": [
    {
      "heading": "Overview and Executive Board assessment",
      "content": "- The Executive Board completed the Article IV Consultation and considered and endorsed the staff appraisal without a meeting on a lapse of time basis.\n- The authorities consented to the publication of the Staff Report prepared for this consultation.\n- Assessment highlights:\n  - Slovenia has shown resilience in face of multiple shocks.\n  - Improving fiscal balances in 2021-24 reversed a significant increase in public debt incurred during the pandemic and helped build fiscal buffers, while high scores on social indicators were preserved.\n  - The banking system appears healthy.\n  - Authorities have embarked on pension, long-term care, and health sector reforms to address population aging."
    },
    {
      "heading": "Recent developments and near-term outlook",
      "content": "- Growth and labor market:\n  - Real GDP contracted in the first quarter of 2025, as investment and exports fell amid weak external demand.\n  - Growth bounced back, supported by a pickup in investment and private consumption.\n  - Growth is projected at 0.8 percent in 2025.\n  - The labor market remains tight despite some softening; job vacancies are still above long-term averages.\n- Inflation:\n  - Inflation fell sharply in 2024 from multi-decade highs in 2022-23, but increased temporarily in 2025, driven largely by food prices.\n- External position:\n  - The external position in 2025 is assessed to be moderately stronger than the level implied by fundamentals and desirable policies, based on projected data."
    },
    {
      "heading": "Medium-term outlook and macroeconomic projections",
      "content": "- Growth projections and drivers:\n  - Growth is projected to strengthen in 2026-27 before moderating to its potential over the medium term, alongside a gradual decline in inflation.\n  - Growth is expected to strengthen in the next years from improved investor confidence and increased export demand.\n  - Projected to stabilize at just above 2 percent in the medium term, with investment and improved total factor productivity counterbalancing demographic headwinds.\n- Inflation outlook:\n  - Inflation would gradually decline toward the 2 percent European Central Bank target as food and energy prices stabilize.\n- Risks to the outlook:\n  - Tilted to the downside.\n  - External risks: escalating trade measures, prolonged uncertainty weakening export demand, undermining confidence, lowering investment; higher import prices slowing disinflation and reducing real incomes.\n  - Domestic risks: delays in implementing public investment or structural reforms, wage growth outpacing labor productivity eroding competitiveness and slowing income convergence.\n  - Upside: faster progress in deepening the EU single market."
    },
    {
      "heading": "Fiscal developments, assessment, and recommendations",
      "content": "- 2025 fiscal outcomes:\n  - General government deficit widened from 0.9 percent of GDP in 2024 to 2.2 percent of GDP in 2025, primarily reflecting higher post-flood reconstruction and a significant increase in the public sector wage bill from a public wage reform and a new winter holiday allowance.\n  - Gross public debt is projected to have declined slightly to 66 percent of GDP in 2025.\n- Budget stance and recommendation:\n  - The 2026 budget will support activity; its stance is moderately expansionary and will help bolster growth given the still negative output gap.\n  - Staff view: a somewhat smaller deficit would have been preferable, implemented through measures to reduce current spending, to preserve fiscal space amid elevated uncertainty and medium-term pressures.\n- Medium-term fiscal pressures and debt outlook:\n  - On top of growing costs for pension and healthcare as the population ages, there are spending needs for defense and the green and digital transitions.\n  - Incorporating the most acute pressures suggests public debt would remain at about 66 percent of GDP.\n  - Overall risk of sovereign debt distress is still assessed as low, but an extended forecast horizon would see an increase in the debt ratio reflecting further spending pressures.\n- Fiscal policy recommendations:\n  - Fiscal consolidation is needed to reduce public debt and preserve the country’s ability to respond to shocks; recommend a gradual, growth-friendly consolidation to place the debt ratio on a downward path.\n  - Revenue-side measures: broaden bases of value added and personal income taxes; further improve revenue administration; reform the property tax.\n  - Reduce the high labor wedge to make the tax system more conducive to growth.\n  - Spending-side measures: focus on reducing spending inefficiencies.\n  - Public wage bill management: the significant increase following the public sector wage reform and the introduction of a winter holiday allowance warrants regular reviews to maintain effectiveness and sustainability.\n  - Defense spending above baseline assumptions should be accommodated by reprioritizing other expenditures, while protecting growth-enhancing public investment and well-targeted social spending.\n  - Fiscal reforms should continue, with implementing the 2025 pension reform described as the linchpin to public pension sustainability.\n  - Health and long-term care reforms: diversify revenue sources, improve efficiency, promote active aging, and address health sector labor shortages."
    },
    {
      "heading": "Financial sector and macroprudential stance",
      "content": "- Banking system resilience:\n  - Slovenia’s banking system remains resilient; banks are well capitalized, highly liquid, and profitable.\n  - Financial stability risks have increased slightly since the 2024 Article IV consultation.\n  - Credit risks have risen for some export-oriented manufacturers; close monitoring of asset quality, especially for exposed banks and portfolio segments, should continue.\n- Policy stance:\n  - The macroprudential policy stance is appropriate.\n  - Letting the bank asset tax expire as planned at end-2028 will help preserve capital buffers."
    },
    {
      "heading": "Structural reforms to boost long-term growth",
      "content": "- Main reform priorities:\n  - Tackle persistent skilled labor shortages by better aligning education and training with market needs, expanding vocational and lifelong learning, and improving migrant integration and recognition of foreign qualifications.\n  - Enhance the business environment, including simplifying construction permits to speed project implementation and increase competition.\n  - Strengthen the innovation ecosystem and expand access to finance for young and innovative firms, including through venture capital, to support dynamic firm growth."
    },
    {
      "heading": "Key economic indicators (Slovenia: Selected Economic Indicators, 2024–30)",
      "content": "- Real sector (annual percentage change, unless noted otherwise)\n  - Real GDP growth: 2024: 1.7; 2025: 0.8; 2026: 2.2; 2027: 2.3; 2028: 2.1; 2029: (no value in source); 2030: (no value in source).\n  - Potential output growth: 2024: 2.6; 2025: 2.5.\n  - Output gap (in percent of potential GDP): 2024: 1.4; 2025: -0.2; 2026: 0.0.\n- Prices (HICP)\n  - Consumer prices (period average): 2024: 2.0.\n  - Consumer prices (end of period): (no value in source for 2025–30).\n- Employment and wages\n  - Unemployment rate (in percent, ILO definition): 2024: 3.7; 2025: 3.8; 2026: 3.9; 2027: 4.0.\n  - Real wages (all sectors) 1/: 2024: 4.1; 2025: 4.3; 2026: 3.2; 2027: 3.1.\n- Public finance (percent of GDP)\n  - General government balance 2/: 2024: -0.9; 2025: -2.2; 2026: -2.6; 2027: -2.7; 2028: -2.8; 2029: -2.9.\n  - General government gross debt: 2024: 66.6; 2025: 66.0; 2026: 65.2; 2027: 65.3; 2028: 65.4; 2029: 65.9; 2030: 66.5.\n  - General government net debt: 2024: 49.8; 2025: 50.1; 2026: 50.5; 2027: 51.1; 2028: 51.7; 2029: 52.5; 2030: 53.3.\n- Monetary and financial indicators\n  - Credit to the private sector: 2024: 5.6; 2025: 4.9; 2026: 4.4; 2027: 4.5.\n- Balance of payments (percent of GDP)\n  - Current account balance: 2024: 3.6; 2025: 3.3.\n  - Terms of trade (goods and services, percent change): 2024: 1.5; 2025: 0.7; 2026: -0.5; 2027: -0.3; 2028: -0.1.\n  - Net international investment position: 2024: 9.9; 2025: 11.9; 2026: 15.0; 2027: 17.6; 2028: 20.0; 2029: 22.3; 2030: 24.4.\n- Memorandum items\n  - Nominal GDP (millions of euros): 2024: 67,418; 2025: 70,194; 2026: 73,265; 2027: 76,495; 2028: 79,972; 2029: 83,404; 2030: 86,975.\n  - Population (millions): (no numeric values provided in source).\n  - GDP per capita (euros): 2024: 31,698; 2025: 32,942; 2026: 34,321; 2027: 35,789; 2028: 37,389; 2029: 38,983; 2030: 40,643.\n\nImf Executive Board Concludes 2025 Article IV Consultation with the Republic of Slovenia\n\n---\n\n\n References\n\n- Republic of Slovenia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/countries/svn\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/01/23/pr-26016-slovenia-imf-executive-board-concludes-2025-article-iv-consultation"
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    "Published: January 26, 2026",
    "The Executive Board completed the Article IV Consultation and considered and endorsed the staff appraisal without a meeting on a lapse of time basis.",
    "The authorities consented to the publication of the Staff Report prepared for this consultation.",
    "Assessment highlights:",
    "Growth and labor market:",
    "Inflation:",
    "External position:",
    "Growth projections and drivers:",
    "Inflation outlook:",
    "Risks to the outlook:",
    "2025 fiscal outcomes:",
    "Budget stance and recommendation:",
    "Medium-term fiscal pressures and debt outlook:",
    "Fiscal policy recommendations:",
    "Banking system resilience:",
    "Policy stance:",
    "Main reform priorities:",
    "Real sector (annual percentage change, unless noted otherwise)",
    "Prices (HICP)",
    "Employment and wages",
    "Public finance (percent of GDP)",
    "Monetary and financial indicators",
    "Balance of payments (percent of GDP)",
    "Memorandum items",
    "[Republic of Slovenia and the IMF](http://www.imf.org/external/country/SVN/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/countries/svn](https://www.imf.org/en/countries/svn)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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