Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Strategically located between Central Europe and the Western Balkans, with excellent infrastructure and a well-educated labor force, Slovenia is an attractive trade and investment partner for companies across a wide range of sectors. After gaining independence from Yugoslavia in 1991, Slovenia rapidly registered dramatic gains in per capita and aggregate wealth, established a stable and well-functioning democracy, and significantly raised Slovenians’ standard of living. Slovenia joined the North Atlantic Treaty Organization (NATO) and the European Union (EU) in 2004, the Eurozone and the Schengen Zone in 2007, and the Organization for Economic Cooperation and Development Europe (OECD) in 2010. In recent years, Slovenia’s economic growth has outpaced that of most other EU member states, and it has enjoyed rising incomes, growing domestic consumption, falling unemployment, low inflation rates, and burgeoning consumer confidence. According to the Slovenian Statistical Office, Slovenia’s GDP growth reached 8.1 percent in 2021, rebounding from a -4.2 percent downturn in 2020. Slovenia is expecting more modest GDP growth in 2022, with the Institute of Macroeconomic Research and Development (IMAD) estimating a growth of 4.2 percent. IMAD highlighted that Slovenia was experiencing supply chain issues as well as labor shortages and expressed concern regarding rising inflation and energy prices. Russia’s invasion of Ukraine is expected to exacerbate inflationary pressures, making a slowdown more likely. With a small domestic market of just over two million people, Slovenia’s economy is heavily dependent on foreign trade and susceptible to international price and currency fluctuations and economic conditions among its larger trading partners.
Slovenia is not a major trading partner for the United States, accounting for less than 0.1 percent of U.S. exports (USD 239.8 million) and less than 0.1 percent of U.S. imports (USD 878 million) in 2021. Seventy-five percent of Slovenia’s foreign trade is with the EU, primarily Germany, Italy, Austria, Croatia, and France. Slovenia also has extensive trade ties with non-EU Western Balkan and Eastern European countries. Outside the EU, Serbia and Russia are Slovenia’s largest export markets, and China its most important import partner. U.S. exports to Slovenia consist primarily of mineral fuels and oils, nuclear reactor components, mechanical appliances, measuring equipment, and machinery, while Slovenia exports pharmaceuticals, electrical machinery and equipment, steel, glass, and glass products to the United States.
According to the Bank of Slovenia, foreign investment in Slovenia totaled EUR 16.6 billion in 2020, a 2.4 percent increase over the previous year. Slovenia’s most important sources for foreign direct investment were Austria (25.6 percent), Luxembourg (13.0 percent), Switzerland (10.7percent), Germany (8 percent), and Italy (7.3 percent). U.S. companies accounted for approximately 9.4 percent of inward foreign investment in 2020, EUR 66 million EUR 66 million (USD 72.5 million) invested directly and an additional EUR 1.48 billion (USD 1.63 billion) invested indirectly through U.S. subsidiaries in other European countries. This combined investment of EUR 1.55 billion (USD 1.78 billion) placed the United States as Slovenia’s third largest source of direct and indirect foreign investment, behind Austria (EUR 2.58 billion) and Germany (EUR 2.40 billion). The most important sectors for foreign investment were manufacturing (33.5 percent), financial and insurance activities (22.5 percent), wholesale and retail trade and repair of motor vehicles and motorcycles (17.1 percent).