Slovenia: Economic growth rises in the first quarter of 2026
GDP growth ranks the best in the euro area: Slovenia’s GDP increased 3.0% in annual terms in Q1, following a 2.0% expansion in the prior quarter. Q1’s reading was the strongest since Q2 2022 and, at the time of writing, was the best reported in the euro area.
In seasonally adjusted quarter-on-quarter terms, the economy expanded 0.7% in Q1, following 0.4% growth in the prior quarter.
Fixed investment spearheads momentum: Relative to the prior quarter’s data, readings in Q1 improved for government consumption (+3.9% in annual terms vs +3.8% in Q4), fixed investment (+12.6% vs +11.9% in Q4) and exports of goods and services (+0.7% vs +0.5% in Q4). In contrast, readings worsened for private consumption (+2.7% vs +3.0% in Q4) and imports of goods and services (+1.5% vs +4.8% in Q4).
Fixed investment emerged as the main engine of GDP growth in Q1, fueled by EU funding and ongoing post-flood reconstruction efforts. On the other hand, exports, while accelerating slightly, still grew at a modest pace—likely constrained by a slowdown in pharmaceutical production and lingering trade frictions.
GDP growth to ease: Our Consensus for Q2’s GDP growth has dropped since the start of the U.S.-Iran conflict and now points to a slowdown from Q1. The war in the Middle East has had a significant impact on energy prices; domestic inflation surged to a joint 28-month high in April, which will likely weigh heavily on private consumption and industrial production. Additionally, persistent trade frictions and sluggish momentum in major trading partners are likely to create further headwinds for the external sector. Downside risks remain, particularly the prospect of energy prices staying elevated for an extended period.