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In the third quarter, euro area GDP grew by 0.4% quarter-on-quarter (seasonally adjusted) and by 0.9% year-on-year, while survey indicators point to stagnation at the beginning of the fourth quarter. Among Slovenia’s main trading partners, France recorded the strongest quarter-on-quarter GDP growth, driven significantly by consumption related to the Olympics. In Germany, GDP increased by 0.2% (-0.2% year-on-year). According to the composite PMI (at 50), euro area activity stagnated quarter-on-quarter at the beginning of the fourth quarter. The services PMI is above 50, reflecting continued growth, while the manufacturing PMI remains below 50, indicating further contraction amid a persistent decline in new orders. The euro area economic sentiment indicator (ESI) also suggests improved sentiment among consumers and in services but shows a noticeably weaker sentiment in industry compared to a year ago. In October, the IMF maintained its forecast for global economic growth at 3.2%, while growth in the euro area in 2025 is now predicted to be slightly higher (increase from 0.8% to 1.2%), mainly due to the strengthening of private consumption.

In the third quarter of this year, GDP rose by 0.3% quarter-on-quarter (seasonally adjusted) and by 1.4% year-on-year. Year-on-year growth has increased compared to the second quarter, mainly due to higher export activity. After falling year-on-year in the first half of the year, exports of goods and services rose by 8.4% year-on-year, mainly due to the low base from last year and a higher number of working days in the third quarter of this year. Export growth was higher than import growth (6.5%), resulting in a positive contribution of the external trade balance to GDP growth (1.9 p.p.). The solid growth of household spending continued (1.9%), and growth of government consumption remained high (9.1%). In contrast, the decline in gross fixed capital formation deepened dramatically (-8.2%), especially in construction. According to data on the value of construction work put in place, construction activity continued to decline in the third quarter. In the first nine months, it was 10% lower than in the same period last year.

In August, the number of persons in employment increased slightly, while in October, the number of unemployed remained roughly unchanged from the previous month (both seasonally adjusted); year-on-year wage growth remained relatively high in August. In August, growth in the number of persons in employment was still the highest in construction, which faces major labour shortages. The year-on-year increase in the total number of persons in employment was still driven solely by the higher number of employed foreign nationals. Their share among all persons in employment was 15.8% in August, 1.2 p.p. higher than a year earlier. At the end of October, the number of unemployed was slightly higher than at the end of September, mainly due to seasonal factors related to the higher inflow of first-time job seekers into unemployment; when seasonally adjusted, the number of unemployed remained similar to the previous month. Year-on-year, the number of unemployed was 3.7% lower in October, with the number of long-term unemployed falling by 12.7% and the number of unemployed people over 55 by 9.9%. In August, year-on-year growth in the average gross wage remained relatively high (4.9% in real terms and 6.5% in nominal terms). In the public sector, wage growth is attributed to an increase in the value of the pay scale grades following a partial wage adjustment for inflation in June, while in the private sector, labour shortages continue to be a key driver of wage growth.

Inflation continued to ease in October, with prices declining by 0.5% month-on-month while remaining unchanged year-on-year. This time, the main reason for the monthly price drop was a new method of calculating network charges for electricity, which led to a roughly 10% month-on-month decrease in electricity prices, while year-on-year, electricity prices were down by 22.7%. Prices in the housing, water, electricity, and gas and other fuels group, prices of goods and services in the transport and communications group, and prices of durable goods also declined. In the food and non-alcoholic beverages group, the year-on-year price increase was roughly on a par with the previous month (1.4%), while growth of services prices has slowed (3.2%). In September, Slovenian industrial producer prices remained largely unchanged month-on-month, while they were 0.9% lower year-on-year. This decrease was largely driven by an 8.4% drop in energy prices and a 1.4% decline in intermediate goods prices, while for the first time since June 2020, prices in the capital goods group were also slightly lower year-on-year. Domestic prices continued to decline year-on-year, while prices on foreign markets increased slightly year-on-year in September for the first time since August 2023.

The deficit in the consolidated balance of public finances was lower year-on-year again in the third quarter of this year; in the nine-month period, it halved compared to the same period last year, reaching EUR 432.7 million. Revenue increased by 10.3% year-on-year in the third quarter, marking a slowdown compared to the second quarter (14.2%), due to slower growth in VAT revenue, a year-on-year decline in receipts from the EU budget and lower growth in revenue from corporate income tax, which remained significantly higher year-on-year in the first three quarters due to a higher tax rate and higher balancing payments of tax this year. Expenditure was 6.2% higher year-on-year in the third quarter, down from 10.1% in the second. The slowdown was mainly caused by a sharp decline in expenditure on subsidies, investments, interest rates, and goods and services. High growth of transfers to individuals and households continued, mostly due to the high regular annual pension indexation at the beginning of the year. The quarterly growth dynamics of expenditure on salaries and wages and other personnel expenditure is affected this year by the change in the timing of the payment of the holiday allowance, and the growth of this expenditure was much lower in the nine-month period than in the same period last year.