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In the second quarter of 2024, euro area GDP grew by 0.2%, with economic sentiment indicators suggesting that similar growth continued in the third quarter. Growth in the second quarter was mainly due to net trade, along with positive contributions from government consumption and changes in inventories, while investments and, to a lesser extent, private consumption declined. Services contributed to the increase in value added, while activity in industry and construction declined. Survey indicators point to continued moderate economic growth in the euro area during the third quarter. The composite Purchasing Managers’ Indicator (PMI) slipped into contractionary territory in September (49.6), with the average value for the third quarter still suggesting weak growth in activity. Growth was driven by services, with services PMI remaining above 50 throughout the quarter. In contrast, the manufacturing PMI indicated further contraction in September amid a persistent decline in new orders. The Economic Sentiment Indicator (ESI) in the euro area has remained virtually unchanged since the beginning of the year but was slightly higher year-on-year in September. Sentiment improved among consumers and in services but weakened in other activities. According to the ECB and OECD projections from September, euro area GDP growth is expected to reach 0.8% or 0.7% this year respectively, with both institutions forecasting 1.3% growth for 2025. 

The available economic indicators for Slovenia were mostly higher year-on-year at the turn of the third quarter, while on a month-on-month basis they remained largely stable compared to previous months. Both exports and imports of goods decreased month-on-month in August but remained higher than a year ago. In the first eight months, exports and imports of goods were on average higher year-on-year (by 3.1% and 2.8% respectively, based on original data). Trade in vehicles and pharmaceuticals were the main contributors to year-on-year growth. Trade in services was lower year-on-year in the first seven months. This was mainly due to trade in transport and other business services. In August, production volume in manufacturing remained largely unchanged from July (seasonally adjusted), following declines in previous months; in the first eight months of the year, production was 0.6% higher than the same period last year (working day-adjusted). After decreasing in the second quarter, real turnover in market services increased in July. It was also higher year-on-year in all segments except in transportation and storage, where it is still below last year’s levels. Real turnover in trade also rose in July, particularly in the sales of motor vehicles, but also in the sales of food and non-food products; it was also higher year-on-year. Construction activity, which has been gradually declining since the beginning of last year, was 12% lower year-on-year in July. Following an improvement in August, economic sentiment deteriorated slightly in September. However, compared to September last year, the economic climate indicator improved. The value of the confidence indicator was lower in retail trade and construction, where the decline in the indicator value was the sharpest compared to the previous year. In contrast, confidence indicators in other activities and among consumers were higher than a year ago. 

Growth in the number of persons in employment continued in July; when seasonally adjusted, the decline in the number of registered unemployed came to a halt in September; year-on-year wage growth was higher in July than in previous months. At the end of September, 43,847 people were unemployed, 1.4% fewer than at the end of August (not seasonally adjusted); the year-on-year decline in the number of unemployed was lower in September than in previous months. Amid labour shortages and retirement of older employees, the numbers of long-term unemployed and of unemployed over 55 fell year-on-year at the end of September, by 13.6% and 10% respectively. The number of persons in employment further increased slightly in July, while the year-on-year growth decreased slightly. In the last 12 months, this growth was mostly supported by the employment of foreign citizens, whose share among all persons in employment was 15.8% in July, 1.1 p.p. higher than a year earlier. The year-on-year real growth in the average gross wage was higher in July (5.8%) compared to previous months, mainly due to the partial adjustment of public sector wages to inflation. Growth in the private sector was also stronger. In the first seven months, the overall average gross wage increased by 3.8% in real terms (by 6.6% in nominal terms) – by 5% in the private sector (by 7.8% in nominal terms) and by 1.7% in the public sector (by 4.4% in nominal terms).

The year-on-year growth of consumer prices (0.6%) continued to moderate in September. Prices remained unchanged month-on-month on average, with the year-on-year inflation declining due to a higher base in September last year, largely influenced by the expiry of the partial exemption from the RES and CHP contribution. The year-on-year price decline in the housing, water, electricity, gas and other fuels group thus nearly doubled in September compared to August (-6.1%), while the monthly price drop was modest. After two months of strong seasonal price declines, the seasonal price increase in the clothing and footwear group was more pronounced in September than in previous years (14.3% month-on-month), though prices were still 0.6% lower year-on-year. The year-on-year growth of services prices moderated slightly but still remained relatively high (3.9%). The prices of food and non-alcoholic beverages rose slightly month-on-month in September, while their year-on-year growth remained low (1.5%).

In the first eight months of this year, the deficit of the consolidated balance of public finances was lower year-on-year. It totalled EUR 379 million, compared to EUR 798 million in the same period last year. Revenues increased by 11.9% year-on-year. This growth was, in addition due to higher revenue from social contributions related to the transformation of the complementary health contribution into a mandatory contribution, mainly due to higher revenue from corporate income tax. Personal income tax receipts also contributed to this government revenue growth, reflecting labour market conditions and the lack of adjustment of the income tax scale and tax relief to inflation this year. Growth in revenues from VAT also strengthened. Revenues from excise duties on energy and receipts from the EU budget were lower year-on-year. In the first eight months of the year, expenditure increased by 8.8% year-on-year. The key drivers of this increase were transfers to individuals and households, primarily due to the high regular annual indexation of pensions, expenditure on goods and services and other healthcare expenditure in connection with the transformation of the complementary health insurance into a mandatory contribution, flood recovery expenditure, and expenditure on salaries, wages and other personnel expenditure, which was influenced by the adjustment of pay grades this year (by 3.36%). Investment expenditure was lower year-on-year. From August 2023 to the end of August 2024, EUR 820.6 million had been disbursed from the state budget to rectify the consequences of floods and landslides, of which EUR 262.5 million was disbursed in the first eight months of this year, most of it for ongoing maintenance and insurance under the emergency Flood Recovery Act.