SLOVENIA


The most developed country of the former Eastern block


Total area: 20,273 sq km (slightly smaller than New Jersey)
Population:  2.1 million
Government type: Parliamentary republic
Administrative division: 200 municipalities (called “obcina”) and 11 urban municipalities
Capital + other major cities: Ljubljana (275,000) + Maribor (95,000)
Currency: Euro (since 1 January 2007)
Languages: Slovene (in regions with Hungarian and Italian minorities, also Hungarian and Italian are official languages)
Ethnicity: Slovene 83.1%, Serb 2%, Croat 1.8%, Bosnian 1.1% and other or unspecified 12% (2002 census)
Religion: Catholic 57.8%, Muslim 2.4%, Orthodox 2.3%, other Christian 0.9%, unaffiliated 3.5%, other or unspecified 23%, none 10.1% (2002 census)
President: (Mr.) Borut PAHOR (since 22 December 2012)
Prime Minister: (Mr.) Miro CERAR (since 18 September 2014)
Date of EU accession: 1 May 2004

map


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.



KEY FEATURES

  • Parliamentary democracy with generally stable legal and regulatory framework
  • Geostrategic position that gives Slovenia access to the European Union as well as Central and Southeastern European markets
  • Excellent and fully modernized communication and transportation infrastructure with a major port on the Adriatic Sea Location at the crossroads of major trade routes
  • Highly-educated work force and innovative technology firms
  • First CEE country to adopt Euro currency (2007)
  • Rapidly ageing population

 


MACROECONOMIC OVERVIEW


Selected economic indicators, Slovenia, 2010 – 2016

 
2010 2011 2012 2013 2014 2015 2016*
GDP
Real GDP growth
%
1.2
0.6
-2.7
-1.1
3.0
2.9
1.7
GDP at current prices
€ bn
36.25
36.90
35.99
35.91
37.30
38.54
Foreign trade
Exports
€ bn
23.31
25.97
26.38
27.00
28.55
30.00
Imports
€ bn
22.79
25.29
24.86
24.90
25.61
26.39
Balance
€ bn
0.52
0.68
1.52
2.11
2.94
3.61
Prices
CPI - average inflation rate
%
1.8
1.8
2.6
1.6
0.4
-0.8
-0.2
PPI - industry - average
%
2.1
4.5
0.9
0.0
-0.6
-0.2
Employment
Registered unemployment
%
7.3
8.2
8.9
10.1
9.7
9.0
8.6
Average monthly gross wage
1,495
1,525
1,526
1,523
1,545
1,556
Exchange rates          
SIT/USD average
-
-
-
-
-
-
-
SIT/EUR average - fixed
-
-
-
-
-
-
-
*data for 2016 - forecast
Source: Slovenian Statistical Office and Institute of Macroeconomic Analysis and Development, IMF, Eurostat, 2016



With excellent infrastructure, a well-educated work force, and a strategic location between the Balkans and Western Europe, Slovenia has one of the highest per capita GDPs in Central Europe (2nd highest after the Czech Republic). Slovenia became the first 2004 European Union entrant to adopt the euro (on 1 January 2007) and has experienced one of the most stable political transitions in Central and South-eastern Europe. In March 2004, Slovenia became the first transition country to graduate from borrower status to donor partner at the World Bank. In 2007, Slovenia was invited to begin the process for joining the OECD; it became a member in 2012.

Slovenia is springboard for European companies wanting to do business in the Western Balkans as well as for the Balkan countries wanting to penetrate the EU markets. Slovenia’s cooperation with the Western Balkans includes political cooperation, support for EU and NATO integration, boosting regional economic ties, and strengthening of scientific, technological and research cooperation. There is significant untapped potential in high-tech and knowledge-based sectors in the region and many Slovenian companies are time-honoured partners in all former Yugoslav republics.

The country currently enjoys solid economic growth – GDP increased by 3.0% and 2.9% in 2014 and 2015, respectively. Tailwinds, including lower energy prices and a surge in EU investment funding, coupled with rising employment helped the economy to sustain considerable momentum and is expected to further expand by 1.7% in 2016 and 2.3% in 2017.

The level of foreign direct investment (FDI) per capita in Slovenia is one of the lowest in the EU, and the labour productivity and the competitiveness of the Slovenian economy is still significantly below the EU average. Taxes are relatively high, the labour market is seen by business interests as being inflexible, and industries are losing sales to China, India, and elsewhere. An increasing burden for the Slovenian economy has been its rapidly ageing population.

 


KEY SECTORS


The main industries are motor vehicles, electric and electronic equipment, machinery, pharmaceuticals, and fuels.

Almost two-thirds of people are employed in services, and over one-third in industry and construction. Important parts of tourism in Slovenia include congress and gambling tourism. Slovenia is the country with the highest percentage of casinos per 1,000 inhabitants in the European Union.


Chemical and Pharmaceutical sector and Biotechnology: The chemical industry is substantial in Slovenia and requires consistent supplies of raw materials. In the pharmaceutical sector there are approximately 546 companies among which only 33 are actually manufacturing. Pharmaceuticals are the backbone of the export mix of the chemicals industry, tyres and inner tubes for vehicles come second followed by plastics.


Logistics and Distribution: The geographical location of Slovenia places it at the intersection of the 5th and 10th Pan-European corridors, making it one of the major transportation connectors between the Adriatic Sea and the Balkans. There are about 2,500 companies in the sector with EUR 3.6 billion in turnover and EUR 1.6 billion in export sales.


Automotive: Slovenia’s automotive industry generates one tenth of the country’s GDP and accounts for 12.5% of its exports of goods. German carmakers Audi, BMW, Daimler, VW, as well as MAN, and Ford in Germany account for some 40% of car component exports, followed by France, Italy, Austria, the UK, and the USA.


ICT sector: The ICT sector in Slovenia employs today more than 20,000 people in some 3,000 companies. Information systems outsourcing has grown to become the largest market in Slovenia, followed by systems integration and hardware support. IT services sales in 2015 were strongest in the finance, insurance industry, and government sectors. The cloud computing sector is the fastest growing segment of the IT industry, presently growing at 40 percent per year.



EXPORT & IMPORT

Slovenia is exceptionally open to international trade – its export/GDP ratio at 78% is one of the highest in Europe. Approximately 70% of total imports and 76% of total exports are EU-related. .

Germany, Italy, Austria, France, Russia and other ex-Yugoslavian republics (esp. Croatia) represent the most important trading partners combining for 90% of Slovenia’s exports and imports.

The key import commodities include motor vehicles, chemicals, fuels and lubricants and food.


Machinery and transport equipment are the leading exports category followed by chemicals and food.


2015 export and import data:




Main import partners:
Germany - 17.3%
Italy - 14.4%
Austria - 8.6%
China - 6.5%
Croatia - 4.8%


Main export partners:
Germany - 20.6%
Italy - 11.2%
Austria - 8.3%
Croatia - 7.8%
France - 4.9%


Sloveniaexternal trade - 2015




See references for our track record in Slovenia.



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