Development report 2024
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Development Report 2024
In Slovenia, a robust post-COVID-19 economic recovery, supported by improved conditions in trading partners and substantial fiscal policy measures, was followed by a slowdown in economic growth and an increase in inflation in 2022 and 2023 in the context of the energy crisis. The impact of rising cost pressures on competitiveness and the population's lower purchasing power was cushioned by measures to support businesses and the population. Despite a relatively weak performance in 2022, economic growth surpassed the EU average again last year, with GDP per capita in purchasing power parity reaching 91% of the EU average in 2023. However, the pace of narrowing the gap with the EU average has slowed: while the gap decreased by 6 p.p. from 2016 to 2019, it only declined by 2 p.p. from 2020 to 2023. Due to the epidemic, the general government balance turned from a surplus to a large deficit in 2020. The deficit gradually decreased with the phasing-out of the temporary COVID-19 support measures for businesses and the population. In 2023, however, it was still significantly affected (-2.5% of GDP) by measures aimed at mitigating the energy crisis and addressing the consequences of floods. Given the new fiscal rules, sustainable deficit reduction will require prioritised planning. Human resource development for delivering quality public services and facilitating the green and smart transformation is progressing too slowly and, despite severe labour shortages, access to quality jobs remains a challenge for certain population groups. While the quality of life has gradually improved, the at-risk-of poverty rate and inequalities have slightly increased in 2022 and 2023. Additionally, the accessibility of public health and long-term care systems faces growing challenges. A review of past trends and development challenges, as outlined in this year's Development Report, shows, similar to previous years, that the key areas of development policy requiring prioritization within the framework of public finances are: accelerating productivity growth and the transition to a low-carbon circular economy, reforming social protection systems (healthcare and pensions), and enhancing the strategic governance of public institutions. In view of the scarcity of public funds, the realisation of objectives in a number of areas will have to be combined with the use of private funds.
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The priority areas for action analysed in this year’s report, which we consider crucial for the long-term sustainable development of Slovenia and higher quality of life, relate to the following challenges:
Trend productivity growth remains weak, although some of its factors have been gradually improving for some years. However, to achieve a significant boost in productivity, it is imperative to accelerate investment in smart and green transitions, as well as to expand and deepen business transformation processes within companies.
The educational attainment of the population has been on the rise for several years; however, the pace of human resource development to ensure the provision of quality public services and to facilitate the green and smart transformation of the economy has been too slow; certain indicators of the quality of basic and upper secondary education have shown signs of deterioration in recent years.
While the health status of the population has nearly returned to pre-epidemic levels over the last two years, the accessibility of public health and long-term care systems faces growing challenges.
Despite a severe labour shortage due to demographic change and employment rates at an all-time high, access to quality jobs is still a challenge for some people.
The at-risk-of-poverty or social exclusion (AROPE) rate and income inequality, which are among the lowest in the EU, have risen slightly in the last two years. However, the at-risk-of poverty rate for some vulnerable groups has consistently exceeded the EU average for many years.
Given the lack of progress in the transport sector and in the use of renewable energy sources, the pace of the transition to a low-carbon economy is too slow and the circular material use rate as a measure of the circular economy remains relatively low.
Certain aspects of government efficiency have shown improvement in recent years (digitalisation and introduction of quality standards in public administration, improvement of the quality and efficiency of the judicial system, reduction of administrative barriers, modernisation of public procurement practices), although most of the key challenges identified in recent years are still relevant today (lack of effective public sector governance, high burden of state regulation, mistrust in the rule of law and the judiciary, high perception of corruption, lack of predictability of the business environment and legislation); the good results in the areas of safety and global responsibility persist.
Indicators of Slovenia's development:
- A highly productive economy creating value added for all
- Lifelong learning
- An inclusive, healthy, safe and responsible society
- A preserved healthy natural environment
- A high level of cooperation, training and effective governance
1. Gross domestic product per capita in purchasing power standards
In 2023, Slovenia reached 91% of the EU average in terms of economic development, measured in GDP per capita in PPS (34,400 PPS), which is 1 p.p. more than in 2022 and the same as the 2008 peak. A decomposition of GDP per capita into productivity and employment rate shows that the gap in economic development with the EU average is now entirely the result of the relatively lower level of productivity, which, however, reached 85% of the EU average in 2023, the highest level ever achieved. The employment rate in Slovenia was above the EU average throughout the period analysed – by 7% in 2019–2021 and by 8% in 2022 and 2023.
Slovenia’s position relative to the average level of development in the EU was only 2 p.p. higher in 2023 than in 2005, while the majority of the new EU Member States have made considerable progress in this period. Compared to 2005, 14 Member States have improved their position relative to the EU average, led by Ireland (by 61 p.p.), while of the new Member States, all except Cyprus have improved their position. Thirteen Member States moved further away from the EU average during this period, most notably Greece (by 28 p.p.), Luxembourg (by 16 p.p.) and Italy (by 15 p.p.). From 2015 to 2019, Slovenia moved closer to the EU average (by 6 p.p.), but from the COVID-19 outbreak (in 2020) to 2023, Slovenia’s progress was very modest (only 2 p.p.). In the period 2015–2023, the greatest progress was made by Ireland (31 p.p.), Romania (21 p.p.), Bulgaria (16 p.p.) and Croatia (15 p.p.), while the largest deterioration occurred in Luxembourg (42 p.p.), Sweden (11 p.p.), Germany (9 p.p.) and Austria (8 p.p.). Luxembourg and Ireland were most significantly above the EU average in 2023 (by 140% and 112% respectively). The spread in the GDP per capita indicator in PPS between the EU Member States, which in 2000 was at 1:9.3 (Romania/Luxembourg), has been narrowing over the years, falling to 1:3.7 in 2023 (Bulgaria/Luxembourg).
2. Real GDP growth
The strong post-COVID-19 economic recovery was followed by a slowdown in economic growth in 2022 and 2023 in the context of the energy crisis. After the recession during the global financial crisis, economic growth largely accelerated in 2014−2017, but it then slowed in 2018 and 2019, mainly due to a slowdown in foreign demand and uncertainty regarding international trade and geopolitical relations. In 2020, all GDP components, with the exception of government consumption, declined due to the epidemic and the related restrictions. With a strong upswing, economic activity in 2021 exceeded the pre-epidemic level. This was mainly due to private consumption, which was supported by government measures and a significant drop in the savings rate. In 2022, growth in the first half of the year stemmed mainly from the post-COVID-19 recovery, while the cooling of activity in the international economic environment due to the war in Ukraine and the energy crisis, together with the inflationary impact on purchasing power, contributed to a significant cooling of activity by the end of the year. Amid high employment, private consumption growth remained relatively strong. Growth in investment and construction activity was supported by public investment, which was also stimulated by EU funds. In 2023, economic growth weakened further, particularly in the export-oriented part of the economy due to the economic slowdown in Slovenia’s main trading partners and a deterioration in cost and price competitiveness (see Section 1.2.1). Growth in private consumption also slowed, mainly due to the impact of inflation on household purchasing power. On the other hand, investment growth and construction activity remained strong.
After several years of relatively high growth, the decline in real GDP in 2020 was lower than the EU average and the recovery in 2021–2023 was stronger on average. The only year with lower growth in the last three years was 2022, this mainly due to the above-average decline in manufacturing production in the context of the energy crisis. The higher growth in 2023 (SI: 1.6%, EU: 0.4%) was a consequence of faster growth in almost all components of domestic consumption. The growth of economic activity in Slovenia was mostly lower than the (unweighted) average of the other new EU Member States before the pandemic year 2020 and mostly higher afterwards.
3. General government debt
Amid high nominal GDP growth, general government debt fell to 69.2% of GDP in 2023. In 2020, it rose by 14.2 p.p. to 79.6% of GDP due to the stimulus measures taken to mitigate the effects of COVID-19 and the economic downturn. With the strong economic recovery and the reduction in the country’s cash reserves, it fell by 5.2 p.p. in 2021, followed by a slightly smaller decline in 2022 (by 1.9 p.p.). In 2023, the general government debt-to-GDP ratio further fell by 3.3 p.p. to 69.2%. The debt ratio fell due to the impact of nominal GDP growth and also the lower primary deficit. Interest expenditure increased slightly in 2023 (to 1.2% of GDP) due to rising government bond yields but was still well below the 2014–2015 peak (3.2% of GDP) and the 2019 level (1.7% of GDP). In the period 2019–2023, during which the countries were exposed to numerous economic shocks, the increase in public debt in Slovenia was among the lowest (3.8 p.p.) in the EU and was below the average for euro area countries (6.3 p.p.) and the EU as a whole (5.4 p.p.), while some countries managed to reduce their debt.
4. Fiscal balance
The general government deficit continued to decline in 2023 and amounted to 2.5% of GDP. The improvement in the government’s fiscal position in 2015–2019 was interrupted by the exceptional circumstances related to COVID-19, which led to a sharp deterioration in 2020 (deficit of 7.6% of GDP). With the post-COVID-19 recovery and lower expenditure on measures to mitigate the consequences of the epidemic, the deficit fell to 3% of GDP by 2022 and further declined to 2.5% of GDP in 2023. Revenue growth rose to 10.6% last year (from 7.4% in 2022), driven by all main revenue groups: taxes, social contributions, revenue from state property and EU sources. Expenditure growth in 2023 was slightly lower than revenue growth (9.5%) but has accelerated significantly compared to the previous year (4%). This was mainly due to an increase in expenditure on subsidies to companies (due to rising energy prices and floods) and wage increases in the public sector, after expenditure on these two categories had been reduced in the previous year due to the discontinuation of measures to mitigate the consequences of the epidemic. Growth in general government investment was also high last year (9.3%) (end of the 2014–2020 financial perspective, including REACT-EU, Recovery and Resilience Facility funds, post-flood reconstruction), but lower than in 2021–2022, the period of post-COVID-19 recovery, when it was around 26%. Growth in expenditure on social benefits and transfers was also lower than in 2022.
In its autumn forecast, the EC estimates that the deficit in the euro area fell from 3.6% of GDP in 2022 to 3.2% in 2023. These projections show that the deficit has remained above the reference value of 3% of GDP in a number of countries due to a significant slowdown in economic growth and measures to support the economy and population in the face of high energy and food prices. The impact of these measures, which include tax cuts, transfers to individuals, subsidies for energy and production, price caps on energy markets, and windfall taxes, on the general government deficit is estimated by the EC (2023a) at 1.2% of GDP in both the EU-27 (1.4% of GDP in 2022) and Slovenia (1.2% of GDP in 2023 and 1.1% in 2022). According to the EC estimate, the fiscal policy stance in the euro area was quite heterogeneous last year and restrictive on average (as in Slovenia).
5. Current account of the balance of payments and net international investment position
After one year of deficit, the current account showed a large surplus again in 2023 (EUR 2.8 billion or 4.5% of GDP). In 2020, when the epidemic severely curtailed domestic spending, the current account surplus rose to its highest level ever (7.2% of GDP). The faster recovery of domestic demand compared to external demand and the deterioration in the terms of trade amid sharp fluctuations in commodity prices on the world markets led to a significant decline in the current account surplus in 2021, before turning to a deficit in 2022. The return to a surplus in 2023 was mainly due to the goods trade balance, as real goods imports fell even more sharply than exports. The sharp decline in imports was mainly caused by a fall in inventories and lower household consumption. In addition to the quantity fluctuations, which contributed EUR 1.5 billion to the annual change in the trade balance (EUR 2.6 billion), the improved terms of trade also had an impact of EUR 1.1 billion. The growth of the services surplus continued, especially in trade in transport and construction services.
Slovenia’s international investment position further improved in 2023 and was positive for the first time since 2002. Compared to 2022, total claims in relation to GDP increased, while total liabilities remained largely unchanged. The net outflows of the Bank of Slovenia (BoS) and the private sector were higher than the net inflow of government financial assets. The BoS increased its foreign liabilities and even more its currency and deposits in the framework of the TARGET settlement system, mainly in connection with the placement of money by domestic commercial banks abroad and the issuance of securities in Slovenia. In 2023, the general government sector increased its net foreign liabilities. The country has increased its debt to foreign portfolio investors and foreign lenders. Higher short-term interest rates on the international money markets have led to an increase in claims in the segment of financial derivatives. The private sector has increased its net external claims. Non-financial companies, domestic commercial banks and investment funds increased their investments in foreign equity and debt securities. Households increased their deposits in foreign accounts in view of rising interest rates and thus higher yields, while other financial intermediaries increased their debts to foreign lenders. Inward FDI flows have risen in recent years, on account of the sale of ownership stakes in domestic companies and recapitalisation, and exceeded the outward FDI flows.
6. Financial stability
The financial system has remained stable in recent times amid a slowdown in economic activity. The share of non-performing loans has fallen significantly in recent years and, according to the EBA, was even slightly below the euro area average in the third quarter of 2023. Data from the Bank of Slovenia show that the weather disaster in August had no negative impact on the non-performing loans ratio. Only in the sectors that were hit hardest by the epidemic (e.g. accommodation and food service activities) is the ratio still relatively high, but here too it has already fallen significantly. The ECB continued to normalise its monetary policy throughout 2023, while at the end of the year, as inflationary pressure eased, it stopped raising its key interest rates. In 2023, they rose by 200 basis points and reached a level comparable to 2008. As a result, credit conditions for companies, households and governments in Slovenia and elsewhere in the EU deteriorated. Although yields to maturity of government bonds and lending rates for companies fell slightly at the end of 2023, they were above the average for the EU and the euro area.
The banks maintained a high level of capital adequacy and liquidity in 2023. The capital adequacy of the banking system continued to improve with a reduction in risk-adjusted assets (sale of a leasing company, lower exposures to the state and slowdown in lending activity) and an increase in capital through retained earnings and was relatively high given the minimum capital requirements. Liquidity also increased and was among the highest in the euro area. This is indicative of the high capacity to cover net liquidity outflows over a short-term stress period (BoS, 2023a). Although the inflow of deposits from the domestic non-banking sectors at banks fell significantly in 2023 (by more than 60%, to EUR 1 billion after high inflows in 2020–2022), this does not mean that there is a need for other sources of funding, as the slowdown in the lending activity of banks was even more significant. The share of foreign sources of funding increased slightly but was still relatively low. In the second half of 2023, when deposit interest rates rose, the maturity structure of deposits in the non-banking sector also improved slightly. Overnight deposits still dominate the deposits structure (80%), but their share fell by about 5 p.p. compared to 2022.
7. Financial system development
Slovenia’s gap with the EU in the level of financial system development remains wide. In 2023, the banking system’s total assets increased by 5.1% despite the decline in lending activity, while the indicator of total assets as a share of GDP further decreased slightly amid higher nominal GDP growth and reached about 30% of the EU average. On the investment side, the growth in the balance sheet total was primarily due to an increase of funds in central bank accounts, while the volume of debt securities of foreign financial institutions also increased. Looking at the sources of finance, the increase was mainly due to time deposits from domestic non-banking sectors and debt securities issued. Amid good business performance, the banks built up additional capital and reserves. The decline in the loan-to-deposit ratio, which was interrupted in 2022, continued in 2023 and reached 0.67, less than half of the 2008 peak. The gap with the EU average in terms of capital market development, measured by the stock market capitalisation-to-GDP ratio, narrowed slightly in 2023, but it was still only around one-fifth of the EU average. The market capitalisation of shares listed on the Ljubljana Stock Exchange increased by almost one-fifth in 2023, against a background of positive capital market developments. A large part of the Slovenian capital market is represented by government bonds, while corporate financing via issuance of shares and bonds is still negligible compared to other sources of financing, and the volume of trading in issued securities is low, which does not attract new investors.
The development gap with the EU average in the insurance sector further narrowed in 2022 and remained smaller than in other segments of the financial system. The volume of insurance premiums in relation to GDP was over 70% of the EU average. Premiums increased by 7% in Slovenia, while they stagnated in the EU. At 8.5% (EU: 5%), growth in non-life insurance premiums matched the highest level in ten years, while life insurance premiums rose by 3.5% after two years of decline, compared with a fall of almost 5% in the EU. The gap in the life insurance sector has therefore narrowed, but Slovenia is still below two-fifths of the EU average. Interest rates on deposits rose slightly last year but were still below the euro area average. The large volume of household deposits in banks, which continues to grow, and low deposit interest rates and the supply of government securities for non-professional investors could accelerate a shift in household saving habits towards an increase in retirement savings, which could increase the share of life insurance and capital market investments in the future.
8. Regional variation in GDP per capita
Amid a slowdown in economic growth in most regions, the gap in GDP per capita between the Osrednjeslovenska and other regions narrowed in 2022. Real GDP decline in all regions in the first year of the epidemic and the acceleration of growth in 2021 was followed by mostly modest economic growth in 2022. The Obalno-Kraška region, which has a high share of accommodation and food service and tourism activities in the structure of its economy and was most affected by the COVID-19 epidemic, recorded the highest economic growth (9.7% in real terms) among all regions in 2022. This led to the narrowing of the gap in GDP per capita and brought the region close to the national average, although it was still below the pre-COVID-19 level. The Gorenjska region, the only other region with higher GDP growth than in the previous year, also recorded high economic growth. In the Jugovzhodna Slovenija region, real GDP fell, most significantly in the Posavska region (-6%), widening the gap to the Slovenian average. In the Osrednjeslovenska region, which stood out for its particularly high economic growth in 2021, GDP only grew by 1.7% in real terms (SI: by 2.5%), which is also the main reason for the narrowing of the gap between Osrednjeslovenska and the other regions.
The relative dispersion of regional GDP per capita also points to a reduction in regional disparities in 2022. At 24.1%, it was 0.7 p.p. lower than in the previous year, but it did not yet reach the pre-epidemic level. The ratio between the two extreme statistical regions decreased slightly (1:2.7), due to lower growth in GDP per capita in the Osrednjeslovenska region and higher growth in the Zasavska region. The gap has also narrowed within the Zahodna Slovenija cohesion region.
Statistical regions, with the exception of the Osrednjeslovenska region, lag behind the European average in GDP per capita and also some neighbouring regions in other countries. In 2022, of Slovenia’s statistical regions, only the Osrednjeslovenska region exceeded the European average (by 31 index points), while the Posavska region again widened the gap to the European average the most. The Zahodna Slovenija cohesion region was above the European average by 9 index points, while the Vzhodna Slovenija cohesion region remained one of the least developed regions, with 73 index points of the European average. The Obalno-Kraška region narrowed the gap to the European average the most (by 6 index points). Given the considerable lagging behind of the majority of the regions, the catching up with the European average seems to be an extremely complex long-term objective. Therefore we compared individual statistical regions with neighbouring regions in other countries that are at a similar stage of development. In 2021, the Osrednjeslovenska region performed 3 index points better in terms of GDP per capita than the Klagenfurt–Villach region, while the Goriška region lagged behind the Italian Gorizia region by 9 p.p. and the Pomurska region was at the same level as the Hungarian Vas region and was ahead of the Hungarian Zala region by 7 p.p.
9. Productivity
The gradual narrowing of the productivity gap between Slovenia and the EU average continued during the epidemic and the energy crisis. Slovenia reached 85% of the EU average productivity level (in purchasing power standards) in 2023, which is 2 p.p. more than in 2019. Amid a sharp deterioration during the global financial crisis and a gradual catch-up after the crisis, this was 1 p.p. above the 2008 peak and still far from the SDS 2030 target (95% of the EU average).
During the energy crisis, real productivity decreased most notably in export-oriented activities. In 2023, with the cyclical slowdown in GDP growth and further employment growth, overall economic productivity, measured in terms of real GDP per employee, remained at a similar level as before the energy crisis (a decline of 0.4% in 2022 and an increase of 0.4% in 2023). Under the influence of weaker foreign demand and unfavourable conditions on the energy markets, (energy-intensive) industry and the transport and trade sectors made a negative contribution to productivity growth in the period 2021–2023. These are the activities that have been an important driver of productivity growth and real convergence towards the more developed EU countries over the last ten years. In contrast, according to the data currently available, amid continued high activity in 2023, value added per employee increased sharply in construction. Productivity in knowledge-intensive services – ICT and professional, scientific and technical and administrative and support service activities – declined last year after strong growth in 2022, but this was due to increased employment, while value added actually increased slightly in 2023.
10. Unit labour costs
Unit labour cost, which measure the nominal wage/productivity ratio, rose sharply in 2023. They have been on an upward trend since 2019, with strong annual fluctuations that have characterised macroeconomic aggregates in the recent period. In 2022, the increase in cost pressures was mainly mitigated by the pass-through to prices (as measured by the value added deflator), which was no longer sufficient to mitigate the strong growth in nominal wages, or more precisely in compensation of employees per employee (+11.8%) last year. This exceeded nominal productivity growth by more than 2 p.p. (9.3%; 0.4% in real terms). As a result, real unit labour costs were also higher than during the global financial crisis, when the cost and therefore price competitiveness of the Slovenian economy deteriorated sharply, with profits also falling sharply during this period.
Growth in unit labour costs in 2023 was particularly high in market services and manufacturing, where the increases also diverged sharply from the EU average. Nominal wage growth in manufacturing (+12.3%) exceeded nominal productivity growth, measured in terms of value added per employee (10.0%), by more than 2 p.p. This also led to further widening of the gap with Slovenia’s trading partners and the EU average, where wage growth (6.6%) was closer to the nominal productivity growth (5.9%). Similarly, the gap in unit labour costs with the EU average widened further also in services in 2023, and even more so in traditional market services (trade, transport, and accommodation and food service activities), where unit labour costs in Slovenia rose by 7.1%. In addition to strong employment, knowledge-intensive services, which include information and communication, professional, scientific and technical, and administrative and support service activities, also recorded an increase in unit labour costs (4.7%). In construction, cost pressure in 2023 was mitigated by high productivity growth, i.e. value added per employee, which led to a decline in unit labour costs in 2023 despite an above-average increase in wages.
11. Export market share
After two years of contraction, Slovenia’s export market share in the global goods market increased by 6% in the first three quarters of 2023. In 2021 and 2022, it decreased by 2.4% and 4.8% respectively. The decline in 2021 was largely due to the product specialisation of Slovenian exports, i.e. modest foreign demand for some of Slovenia’s most important product groups (e.g. vehicles) and a significant increase in the value of international trade in raw materials (reinforced by price increases), which account for a relatively small share of Slovenian exports. The decline in market share in 2022 was largely due to a deterioration in competitiveness, as the rise in global commodity prices was accompanied by high growth in labour costs and domestic prices. The negative impact of the deterioration in competitiveness is also confirmed by quantitative data, which point to slower growth (2022) or a sharper decline (Q1–Q3 2023) in Slovenia’s real exports compared to quantitative trends in global demand. Despite the significant deterioration in cost and price competitiveness (see Section 1.2.1), which was comparable to that during the global financial crisis, the current data point to a smaller decline in export performance in 2022–2023 than in 2008–2012, measured in terms of both value and volume market share.
The EU market share grew by an average of 3% in the first three quarters of 2023, with significant differences in the main product groups. More detailed data on the export/import flows of EU Member States, to which Slovenia exports around three-quarters of all its goods exports, show that the main drivers of market share growth in 2023 were industrial machinery and equipment, whose market shares also increased during the health and energy crises. After two years of decline, the market share of the pharmaceutical industry, where only slightly more than half of exports are destined to the EU market, also increased on average in the first three quarters of 2023. In energy-intensive products, Slovenia’s market share in the EU market for chemical and non-metallic mineral products increased after a sharp decline in the previous year. However, the market shares of other energy-intensive products – paper and metals – declined in 2023. Among the main product groups, the market share on the EU market for electrical machinery and equipment and road vehicles continued to fall in 2023. The latter was already around one-third lower than before the outbreak of the COVID-19 epidemic.
12. Foreign direct investment
After increasing in the post-COVID-19 period (2021–2022), foreign direct investment (FDI) flows weakened in 2023 due to deteriorating financing conditions for international investment projects (driven by elevated inflation and interest rates). The value of inward FDI more than doubled in the last nine years (2015–2023), primarily owing to the inflow of equity capital, but also partly to debt instruments. Higher inward FDI was primarily due to the acceleration of the privatisation process and increased sales of equity stakes in Slovenian companies. There were also more expansions of the existing foreign-owned companies and new (greenfield) investment. EU Member States were the largest investors in Slovenia, with Slovenia’s main trading partners (Austria, Germany, Italy, Croatia and Switzerland) contributing about three-fifths of the total value of direct investment. The average implicit rate of return on FDI was 7.8%, the highest among the international investment components, reflecting foreign direct investors’ long-term interest. Outward FDI has been increasing since 2014 but at a relatively slow pace. In 2023, the stock of such investment was 48.2% higher than in 2010. Slovenian direct investors have the largest share of direct investment in the other countries of the former Yugoslavia. The declining share of goods exports to this region over the last eight years indicates that Slovenia is replacing part of its former exports with local production in these markets. The average implicit rate of return on foreign direct investment was 3.3%.
Slovenia is still one of the EU Member States with the lowest inward FDI-to-GDP ratio. Even though the inward FDI-to-GDP ratio had risen to 34.0% by 2023, it remains lower overall than in the other new EU Member States, although it recorded the highest growth among these countries in the period 2009–2022. In terms of its outward FDI-to-GDP ratio, Slovenia outperformed Romania, Bulgaria, Poland, Slovakia, Lithuania, Croatia and Latvia among the new EU Member States.
13. The European Innovation Index
According to the European Innovation Index (EII), Slovenia was again classified in the group of moderate innovators in 2023 and the significant gap to the average of innovation leaders remained unchanged. The EII measures the average research and innovation performance of EU Member States. Its value determines the classification of countries into four groups. The assessment of countries’ progress in the last EII measurement was based on the benchmark value of the EU average from 2016. Slovenia was classified as a moderate innovator for the fifth time in a row in 2023, outperforming the average for its group. Prior to 2018, Slovenia was classified higher (among strong innovators), with an EII value close to the EU average. The performance of the innovation system, as measured by the EII, deteriorated in the period 2016–2020, but the negative trend was broken in 2021, leading to Slovenia’s best result in relation to the EU average in 2023. Nevertheless, Slovenia’s overall progress in the period 2016–2023 was the fifth lowest in the EU. Slovenia therefore still lags far behind its SDS 2030 target of belonging to the group of innovation leaders (see Table).
Insufficient investment in R&D during the period 2016–2023 significantly weakened Slovenia’s EII ranking, while some indicators of innovation activity had the opposite effect. R&D investments were too low in both the public and business enterprise sectors, with the former already lagging well behind the EU average and both sectors lagging even further behind the innovation leaders. From 2019 onwards, public investment in R&D began to rise in some V4 countries (especially in Poland, while the Czech Republic constantly invested more than Slovenia). Business enterprise sector investment remains above that of the V4 and it is encouraging that it has also been slightly above the EU average for the past three years. Amongst them, spending on non-R&D innovation investment was significantly lower. The increased number of product and business process innovations introduced by SMEs in the 2018–2020 period has contributed to Slovenia performing better compared to the EU average and, for product innovation, also compared to the average of the innovation leaders.
14. R&D expenditure and the number of researchers
Expenditure on research and development (R&D) was increasing in nominal terms in 2018–2022, but relative to GDP it continues to lag behind the 2011–2015 period. In 2022, total R&D expenditure reached a record high in nominal terms (EUR 1,195 million), but in relative terms it stagnated for the third year in a row at around 2.1% of GDP, which is still slightly below the EU average and well below that of the innovation leaders. In 2022, public sector investment in R&D was also higher than ever before in nominal terms, but at 0.55% of GDP it was well below the 2011 level, before showing a decline with the consolidation of public finances. It was also relatively low in an international comparison (2021 EU: 0.71; IL excluding Denmark: 0.73; V4: 0.58% of GDP). After a decline in 2015–2017, business enterprise sector investment stagnated at around 1% of GDP (2021 EU: 1.30; IL excluding Denmark: 1.74; V4: 0.71% of GDP), while the business enterprise sector’s R&D performance showed a modest upward trend (as a share of GDP) over this period, though still remaining well below the 2013 peak.
Growth in the number of researchers in the business enterprise sector was halted in 2021 and their number has stagnated, albeit at a high level, in the last two years. In 2008–2020, the number of researchers (in full-time equivalents) increased primarily in the business enterprise sector, which is also the largest employer. The business enterprise sector employed 54.3% of all researchers on average in 2008–2022 and 57.9% in 2022. While the share of the Slovenian business enterprise sector has been above the EU average since 2011, it remains well below the average of the innovation leaders, which requires further attention against the background of a steady increase of the share in the V4 group (2022 EU: 56.7%; IL: 68.1%; V4: 54.4%). The public sector faced a decline in the number of researchers in 2011–2017, but this trend has been halted since 2018, which together with increased funding also for young researchers (ARRS, 2023) indicates an improvement in the trend. However, significant challenges persist regarding the improvement of career conditions (IMAD, 2023d).
15. Intellectual property
In 2023, Slovenia has significantly narrowed its gap with the EU average in the number of patent applications filed with the European Patent Office (EPO), although the gap remains large, as does the gap with the innovation leaders. According to provisional EPO data, Slovenian applicants filed 72 patent applications per million inhabitants in 2023, which is almost one-fifth more than the average in the period 2008–2023. However, the gap remains wide. In that period, the EU average was 2.4 times higher than in Slovenia and the average in the innovation leaders was 5.7 times higher. With regard to the level of patentability, as measured by the number of patent applications per million inhabitants, Slovenia ranked around 13th among EU Member States throughout the 2008–2023 period and took the leading position among the new EU Member States or was even ahead of some similarly developed countries (Spain and Portugal). In 2014–2023, Slovenian applicants filed about 20% of their applications in two technological fields (electrical machinery, apparatus and energy and organic fine chemistry) and about 10% in medical-related technologies (EPO, 2024).
Slovenia has made considerable progress in the area of trademarks since 2011, but a notable gap remains in the area of designs, despite some advancements seen in 2022–2023. In terms of EU trademark legal protection, the number of Slovenia’s applications per million inhabitants was mostly rising in 2008–2023, surpassing the EU average since 2019. However, concerning the number of registered Community designs, the gap with the EU average remained large throughout the 2008–2021 period. Although the situation has improved slightly in the last two years, this still indicates a lack of awareness of the importance of design in increasing value added. By filing a single application with the EU Intellectual Property Office (EUIPO), applicants can secure legal protection for either of the aforementioned intellectual property rights throughout the EU, leading to relatively lower costs and significantly faster legal protection procedures compared to patents, which affects their attractiveness for companies of all sizes and activities.
16. Corporate environmental responsibility
The ISO 14001 standard is still the most widespread environmental certification in Slovenia, followed by the Ecolabel, while the EMAS scheme is the least widespread. In an international comparison, Slovenia stands out the most for its high uptake of Ecolabels, ranking second among EU countries, behind only Austria. This is mainly due to accommodation establishments, which account for more than 70% of the Ecolabels awarded in Slovenia (compared to around 23% in the EU). The uptake of ISO 14001 certificates, the most widely used international standard for responsible environmental management, is also higher in Slovenia than the EU average, but Slovenia still lags behind most of the new Member States. The growth in the uptake of EMAS certificates is progressing at the slowest pace both in Slovenia and in the EU. Slovenia falls below the EU average in this regard but remains ahead of most of the new Member States.
Given the high number and variety of ecolabels, standardised rules are being adopted at the EU level in order to limit greenwashing. Within the EU internal market, there exist numerous eco-labels with varying management models (offering different levels of safety, control and transparency), with their numbers continuing to rise. This has an impact on consumers’ ability to make environmentally sustainable choices. In spring 2023, the European Commission therefore adopted a proposal for a directive on substantiation and communication of explicit environmental claims (the Green Claims Directive), in order to protect consumers from greenwashing, so that they can make more sustainable decisions. The proposal for a directive provides for common rules on environmental labels that go beyond existing legislation such as the EU Ecolabel Regulation, the Eco-Management and Audit Scheme (EMAS), Regulations on the organic farming label, energy efficiency labelling, and CE marking. The proposal for a directive is meant to act as a safety net for all sectors where environmental claims or labels are unregulated at the EU level (Rdeči karton zelenemu zavajanju, 2023; Green Claims Directive, 2023).
1. Share of the population with tertiary education
The share of adults (25–64 years) with tertiary education has been above the SDS target since 2020, although it remains considerably lower than in most economically developed EU countries. The share of adults with tertiary education has risen in the long term due to the high participation of young people in tertiary education and the transition of younger, on average better-educated people to higher age groups (a demographic effect). This growth was interrupted in 2022, but at 40.1% it remained above the EU average (34.3%). It was above the SDS 2030 target (35%) for the third year in a row, although it was lower than in most developed Northern and Western European countries (41–53%). The highest increase in the share over the period 2012–2022 was seen in the 35–44 age group, where it was also most significantly above the EU average in 2022. Despite the high participation of young people in tertiary education, the share in the 20–24 age group was below the EU average, which could be due to the longer time spent in education. Due to their higher participation in tertiary education, the share of women with tertiary educational attainment was higher than the share of men, and the difference between tertiary-educated nationals and those born abroad was larger than the EU average. The share of people with tertiary education was highest in the most developed Osrednjeslovenska region (48.9%), while it was the lowest in the Posavska region (30.5%).
Despite a decline, Slovenia’s share of employees with tertiary education was still above the EU average in 2022. The decline is attributed to the robust growth in the employment of people with low and upper secondary levels of education, which is linked to the increase in economic activity and employment in sectors that predominantly employ workers with low and upper secondary education (construction, manufacturing, and transportation and storage). In 2022, the share of employees with tertiary education was 46.6% (EU: 39.3%); in most private sector activities, it was lower than in the public sector.
2. Enrolment in upper secondary and tertiary education
The number of people enrolled in upper secondary education increased in the 2022/2023 academic year for the third year in a row. After declining for several years due to demographic reasons (smaller generations of young people), it has risen again in recent years with again a larger generation of young people and is now close to the level of ten years ago. The share of young people enrolled in general upper secondary schools fell in 2012–2022, while the share of those enrolled in vocational schools increased and has been above the EU average for several years. However, given the general labour shortage due to demographic reasons, the favourable economic developments and the high proportion of young people opting for tertiary education, employers are struggling to find workers with vocational education. According to demographic projections, the number of those enrolled in upper secondary education is likely to continue to rise in the future. In this context, it is crucial to equip future labour force with a range of skills to cope with the rapid transformations in the world of work brought about by the green and digital transition, technological change, a long-lived society, and other development trends.
The number of students enrolled in tertiary education mostly declined in 2012–2022 due to smaller generations of young people. In the 2022/2023 academic year, it was 19.9% lower than ten years ago. The only field where the number of students increased is health and welfare, where the share in total enrolments also increased the most and was above the EU average in 2021. The share of students enrolled in science and technology has been between 29% and 30% since the 2013/2014 academic year and was the sixth highest among EU Member States in 2021. However, against the backdrop of negative demographic trends, their number declined, which has a negative impact in terms of the future supply of human resources for the transition to a smart economy. The share of students enrolled in social sciences, which was also below the EU average in 2021, declined. Demographic forecasts indicate that the number of students will increase in the coming years and thus also the supply of graduates on the labour market. In the 2022/2023 academic year, the share of female students (57.7%) was similar to previous years. As far as the internationalisation of tertiary education is concerned, the proportion of foreign students has increased over the last ten years (to 10.6% in the 2022/2023 academic year) and was above the EU average according to the latest international data.
3. Tertiary education graduates
The number of tertiary education graduates decreased in 2022 due to the demographic trends and remained well below the 2012 peak. Due to the smaller generation of young people, the number of graduates mostly decreased over the last ten years and was 23.4% lower in 2022 than ten years ago. The most significant drop in the number of graduates was recorded in the social sciences, which account for a 28.2% share in the structure of graduates. The highest increase was seen in the share of health and welfare graduates, although it was still below the EU average in 2021 and is not sufficient to meet the needs of a long-lived society. From the perspective of the transition to a smart economy, the decrease in the number of graduates in science and technology (by 9.8% compared to 2012) has a negative impact, and although the share of these graduates is the sixth highest among EU Member States, it does not meet demand. The number of graduates in education, who are in high demand (see Section 2.1), was one of the lowest in ten years in 2022. In 2022, 59.3% of tertiary education graduates were women. Their share has not changed significantly over the years and is higher than the share of men in all fields of education, with the exception of science and technology.
In 2022, the number of new PhDs increased but was among the lowest in the last decade. It peaked in 2015 and 2016 but has mostly declined since 2017. These trends are related to a decrease in the number of enrolled doctoral students between the academic years 2012/2013 and 2015/2016 and on average longer time spent in education (in 2020 compared to 2012). The number of new PhDs per 1,000 inhabitants aged 25–34 (in 2021) was below the average in the EU and innovation leaders. In this comparison, the number of new PhDs in science and technology (per 1,000 inhabitants aged 25–34) was also lower. Such trends are unfavourable from the perspective of strengthening the country’s human resources in the fields of R&D and innovation. The number of those enrolled in doctoral studies in the 2022/2023 academic year was roughly the same as the previous year and was far from the 2011/2012 peak, which is unfavourable from the perspective of the future supply of professionals.
4. Performance in reading, mathematics and science (PISA)
In 2022, 15-year-olds in Slovenia performed worse in mathematics, science and reading compared to 2018. According to the PISA 2022 survey, the decline in the performance of 15-year-olds in Slovenia in mathematics, science and reading, which is an indirect indicator of the quality of the education system, was more pronounced compared to 2018 than the EU average. The deterioration was greatest in reading literacy (19th in the EU), while mathematical and scientific literacy are still above the EU average. In 2022, the SDS target (by 2030), which is to be ranked in the top quarter of EU Member States, was only achieved in science literacy, where Slovenia ranked a high fourth, behind only Estonia, Finland and Ireland. The share of 15-year-olds with low achievement (below proficiency level 2) increased across all literacy types between 2018 and 2022. One of the targets of the Strategic Framework for European Cooperation in Education and Training is that the share of 15-year-olds with low achievement (below proficiency level 2) in reading, mathematics and science should be less than 15% by 2030 on the respective literacy scale. Slovenia no longer meets this target in any of the literacy types. In 2022, the figures were 26.1% in reading, 24.6% in mathematics and 17.8% in science (OECD, 2023).
Inequalities in the learning achievements of 15-year-olds increased between 2018 and 2022. In 2022, girls achieved better results than boys in reading and science and the same as boys in mathematics. Fifteen-year-olds with the highest socio-economic status performed better than their peers with the lowest socio-economic status in all three literacy types; the gap between the two groups was narrower than the EU average but widened between 2018 and 2022. Fifteen-year-olds with a migration background performed worse in reading than their native peers, the difference between them being larger than on average in the EU.
5. Education expenditure
In 2022, public expenditure on education (as a % of GDP) fell and, similar to private expenditure, was comparable to the EU average. Public expenditure as a share of GDP declined between 2012 and 2017. In the first few years, the decline mainly resulted from austerity measures after the global financial crisis, changes in social legislation and demographic reasons. In 2018–2021, it rose again slightly, with annual fluctuations, and then declined in 2022, falling 0.6 p.p. short of the 2010 peak, with the gap being widest in upper secondary and tertiary education. In 2020 (latest international data), public expenditure on education was comparable to the EU average and the average of the 22 EU Member States that are also members of the OECD but much lower than in the economically developed countries (Sweden, Denmark, Belgium and Finland). Only expenditure on basic education was above the EU average, while expenditure on tertiary and upper secondary education lagged most significantly behind. Private expenditure on education amounted to 0.64% of GDP in 2022 and was higher than in 2021; according to data for 2020, it was about the same as the EU-22 average (0.56% of GDP).
Although expenditure (both public and private) per participant in education mostly increased in the last decade, it remained low by international comparison. In 2020, the last year for which internationally comparable data are available, expenditure on education per participant (in USD PPS) was below the EU-22 average at all levels of education. For several years, the largest gap has been recorded at the upper secondary school level (the gap was wider in vocational and technical education than in general upper secondary education), where the participation of young people in education is high, while public and private expenditures are low.
6. Participation in lifelong learning
Participation of adults (aged 25–64) in lifelong learning increased for the second year in a row in 2022, surpassing the SDS target for the first time. Participation has mostly declined since 2010, most sharply with the outbreak of COVID-19 epidemic in 2020. In 2021, it rose sharply, largely due to the increase in webinars, the increased availability of publicly funded training and the wide availability of free training; the data were also impacted by a change in methodology. In 2022, participation in lifelong learning increased even further and, at 22.3%, for the first time exceeded the SRS 2030 target (19%), which is also the target of the Resolution on the national programme of adult education in the Republic of Slovenia 2022–2030. Participation in Slovenia was well above the EU average (11.9%) and behind only Sweden, Denmark, the Netherlands and Finland among all EU Member States. Participation in lifelong learning has increased in all age and education groups but is still the lowest among people with a low level of education and older people (55–64 years). The highest participation rate was recorded in the Osrednjeslovenska region, the lowest in the Koroška region. In 2022, participation increased in all regions except the Koroška and Primorsko-Notranjska regions.
Broken down by activity status, the largest increase in participation in lifelong learning in 2022 was recorded among the unemployed, while the highest participation was still seen among persons in employment. The participation of persons in employment and the unemployed in lifelong learning was significantly above the EU average, while the participation of inactive persons was slightly above the EU average and also saw the smallest increase compared to 2020. Differences in participation also exist among persons in employment. Participation is higher on average in activities with a higher share of tertiary-educated people. It is highest in finance and insurance and education and lowest in construction, accommodation and food service activities, and administrative and support service activities.
7. Attendance at cultural events
In 2022, the attendance at cultural events increased, although it was still well below the 2019, i.e. pre-epidemic, levels and below the SDS target. The average attendance per inhabitant was highest in 2012, owing to the many events hosted by Maribor, the city that held the European Capital of Culture title that year. In the remaining years it was almost half lower (around 5–6 visits per inhabitant). In 2020, the average attendance at cultural events per inhabitant fell sharply due to COVID-19 containment measures. In the following years, when containment measures were less strict or were lifted, it gradually increased again but remained below the levels already reached and the SDS target. The highest number of visitors in 2022 was again recorded in houses of culture and cultural centres, but despite the higher number of events than before the epidemic, the number of visitors has not returned to previous levels. The largest increase in 2022 was recorded in visits to film screenings, with Slovenian film screenings recording a strong increase and accounting for 17.1% of all screenings, the highest figure in ten years. Of all the types of cultural institutions, only attendance at musical institutions in 2022 was above the level of the pre-epidemic period.
Cultural institutions carry out many activities enriching the cultural offer; in 2022, the number of these activities increased after falling temporarily, though it was still lower than before the epidemic. The number of events held by institutions with stage activity fluctuated between 2016 and 2019, then dropped significantly in 2020 due to the epidemic, before rising in 2022 for the second year in a row, when it was only 2.3% lower than in 2019. By type of activity, the highest attendance was recorded for film screenings, musical events, and events showing dramatic and other theatre works, while the lowest attendance was recorded for ballet events (see Section 2.2). In 2022, institutions with stage activity performed the highest number of new works since 2016, 8.2% being co-productions with foreign co-producers and 56.2% with Slovenian co-producers. They organised fewer festivals than in 2021 but many more festival events. Museums and galleries organised fewer exhibitions in 2022 compared to 2021 (due to fewer temporary exhibitions). Film production, measured by the number of feature films produced, increased in 2022 after declining sharply in the previous two years.
8. Share of cultural events held abroad
In 2022, the share of cultural events held abroad increased and came close to the pre-epidemic levels. Touring is an indirect indicator of the quality of cultural production in the country and signifies recognition of good work. The share of cultural events held abroad reached the SDS target in 2017–2019 but declined sharply in 2020 as a result of the COVID-19 epidemic. In 2021 and 2022, when containment measures were gradually lifted, it rose again and, according to the latest data, stood at 3.6%, once again exceeding the SDS 2030 target (3.5%). A stronger increase can be seen in the share of museum events, which came close to the 2016 peak, and a slight increase was also recorded in the share of the performing arts. In the structure of cultural events held abroad, the share of those held in other EU Member States was 82.8% in 2022, which indicates the geographical attachment of Slovenian culture to this area.
Although the number of visiting events from abroad increased in 2021, it remained lower than before the epidemic, especially in stage activity. Visiting events from abroad enrich the offer of cultural events in the country and show the extent of cooperation with cultural institutions from abroad. After a sharp decline in visiting events from abroad due to the epidemic and the containment measures, the number of visiting events from abroad increased in 2022 for the second year in a row, while the share of visiting cultural events from abroad fell (to 2.8%) due to the lower share of stage activity. Three-quarters of visiting events from abroad came from EU Member States – the largest share to date.
1. Healthy life years
Healthy life expectancy at birth in Slovenia exceeds the EU average. The more years that a person on average spends healthy, the less pressure there is on social protection systems due to early retirement and demand for health and long-term care services. A SURS (2019) analysis showed that the very low value of this indicator in Slovenia in recent years was mainly related to inadequate translation and the method of surveying, which was already partially corrected in 2019 and fully corrected in 2020. The indicator improved slightly further in 2021 over 2020. On average, Slovenians can expect 65.4 years of healthy life or life free from any limitation (EU: 64.2 years), falling short of the SDS target only in the number of healthy life years for men. Healthy life expectancy at age 65 improved slightly, to 10.7 years (EU: 9.7 years). Moreover, since 2020, Slovenia no longer lags behind the EU in terms of the share of healthy life years in relation to life expectancy. In 2021, healthy life years represented 81.2% of the total life expectancy in Slovenia (EU: 79.6%).
In 2021, healthy life expectancy at birth was the longest for men in the Primorsko-Notranjska region and for women in the Gorenjska region. Healthy life expectancy varies considerably among regions. The biggest difference is between men at birth. Men born in 2021 in the Primorsko-Notranjska region can expect to live 14.3 more years free from any limitation (67.3 years or 85.2% of life expectancy) than men in the Zasavska region, women in the Gorenjska region (74 years or 86.6% of life expectancy) 9.5 more than women in the Posavska region. In 2020, healthy life expectancy at birth increased the most for women in the Primorsko-Notranjska region (by 6.5 years) and for men in the Podravska region (by 2 years). Women can expect more healthy life years than men in all regions with the exception of the Posavska region, with the largest gap in the Zasavska region (11.5 years).
2. Life satisfaction
In 2023, life satisfaction peaked in Slovenia and was well above the EU average, with 93% of satisfied respondents. It was 2 p.p. higher than in 2022, 1 p.p. higher than before the COVID-19 epidemic and 4 p.p. higher than before the global financial crisis. On average in the EU, overall life satisfaction remained at the same level as before the pandemic. In recent years, life satisfaction has risen in the Member States that had low satisfaction rates before the epidemic, such as Bulgaria and Greece, and fallen slightly in the Member States with above-average satisfaction rates. In 2019–2023 (last survey in the year), the largest increase in the share of those satisfied was seen in Poland (by 9 p.p.). In autumn 2023, Slovenia ranked 8th in the EU, for the first time behind Poland and ahead of Germany, where satisfaction has fallen by 5 p.p. points in the last four years.
The shares of those citing problems of rising prices and energy supply decreased significantly at the end of 2023 compared to the beginning of the year at all three levels: personal, national and the EU. According to the latest survey (October–November 2023), the main concerns of Slovenian respondents were no longer energy supply and rising prices, but the war in Ukraine, immigration and terrorism (higher than the EU average). Among the most important concerns at the national level, the proportion of Slovenian respondents citing the climate crisis and immigration increased compared to the previous survey (by 10 p.p. and 20 p.p. respectively), while the share of those citing health, pensions and energy supply fell, although the decline in Slovenia was less pronounced than the EU average. The percentage of those citing inflation and the cost of living, the financial situation of the household, and the economic situation in the country as the main concerns at the personal level was still high in Slovenia, although it was lower than in previous surveys and lower than the EU average. Satisfaction with the financial situation of the household and personal job satisfaction in Slovenia were at an all-time high in autumn 2023. Compared to the survey conducted in mid-2023, satisfaction with personal job situation increased by 4 p.p. in autumn 2023, and satisfaction with the financial situation of the household by 1 p.p. In our estimation, this was due to the high employment rate and government measures to mitigate the impact of rising (energy) prices on the financial situation of the population.
3. The Gender Equality Index
In the last three years, the Gender Equality Index (GEI) for Slovenia was slightly below the EU average. Until 2017, the country had made faster progress in terms of gender equality than the majority of other EU Member States. Since then, however, progress has stalled, mainly due to a lower score in the area of power (lower political participation of women). After a period of decline in previous years, the GEI rose to an unprecedented high of 69.4 points in 2023. Nevertheless, Slovenia still ranks 12th among EU Member States. Progress in the areas of knowledge and power were the main drivers for the increase in the overall score. In order to meet the SDS 2030 target (> 78), Slovenia should improve its GEI score by more than eight points by 2030.
Since 2010, Slovenia has achieved the highest scores in the areas of health and money, while gender inequalities have been the most pronounced in the areas of knowledge and power. Men more often than women consider that they are in good or very good health, but health-related risk behaviours are more prevalent among men. In 2021, women were more likely to report that their needs for medical and dental examinations were not met than men. In the field of knowledge, the proportion of people participating in lifelong learning and the proportion of persons with tertiary education have increased, but the unequal distribution of women and men in different fields of study remains a challenge. Gender segregation is thus present in various labour market sectors. In Slovenia, the gender gap in employment rates is relatively low and the gender pay gap is below the EU average (see Section 3.2). Women’s representation in politics declined in 2018–2021, followed by an increase in 2022. According to the latest data for 2023, the share of women in the Slovenian Parliament was 37.8% (EU: 33%) and the share of women ministers was 33.3% (EU: 33.4%) (EIGE, 2024). The proportion of women in leadership positions in the largest listed companies remains relatively low and below the EU average. In 2022, slightly more women (26%, EU: 34%) than men (24%, EU: 25%) were responsible for the daily care of others. Greater inequalities were seen in unpaid housework, which was carried out daily by 69% of women (EU: 63%) and only 29% of men (EU: 36%).
4. Life expectancy
In 2022, life expectancy at birth in Slovenia nearly returned to pre-epidemic levels. Overall, at 81.3 years, it was a good three months below the 2019 figure (the gap was greater at the EU level). Life expectancy at the age of 65 in 2022 (19.8 years) was only slightly more than three months lower than in 2019 (similar to the EU). Life expectancy at the age of 65 in 2022 was 17.8 years for men and 21.5 years for women. Excess mortality was lower in 2022 and 2023 (11.2% and 6.2% respectively) than in the first two years of the epidemic (2020: 18.8%, 2021: 15%). Due to higher mortality with COVID-19 among the elderly, the average age at death was still higher (78.7 years) than before the epidemic, while the premature mortality rate was lower (2022: 14.5%). In the decade prior to the epidemic, gains in life expectancy had been slowing down in many OECD countries. The main causes that have made it difficult for countries to maintain the previous progress in reducing deaths from circulatory diseases are slowing improvements in reducing death rates from heart disease and stroke, rising levels of obesity and diabetes, as well as population ageing (OECD, 2023d). When it comes to future trends in life expectancy, the number of indirect deaths related to the unavailability of preventive and emergency health services and psychosocial support during the epidemic remains unknown (OECD and EU, 2020).
In 2022, life expectancy at the regional level was higher than before the epidemic, especially among men, and premature mortality decreased in most regions. Women in the Obalno-kraška region (84.7 years) and men in the Osrednjeslovenska region (79.6 years) had the longest life expectancy at birth. The difference between the two extreme regions was 2.7 years in men and 3.4 years in women. Compared to 2021 and 2019, life expectancy increased for men in particular, especially in the Podravska and Koroška regions (by around 1.6 years) and for women in the Pomurska region (by 1 year). Premature mortality decreased in most regions compared to 2021, with the largest decrease compared to other regions in the Zasavska and Posavska regions, where, as in Jugovzhodna Slovenija, the decrease was highest among men (23%). Among women, it was also highest in the Zasavska and Posavska regions, but only about half as high as among men. It was lowest in the Goriška region (5.9%).
5. Unmet needs for healthcare
In 2023, 3.8% of the Slovenian population reported unmet needs for healthcare, which is lower than in 2021 but still significantly higher than before the COVID-19 epidemic and higher than the EU average. The main reason cited for the extremely high unmet needs in 2021 were the containment measures adopted in 2020, which led to doctor’s appointments being postponed and waiting times being extended to 2021. In 2022, the epidemic situation improved, which was also reflected in lower unmet needs, compared to a slight increase in the EU on average. In 2023, unmet needs remained at roughly the same level as in 2022.
The main reason cited for unmet needs in Slovenia were long waiting times, while the percentage of respondents citing financial reasons was small. This is related to a broad healthcare benefits basket and very low out-of-pocket expenditure on healthcare (see Indicator 3.8). In practice, access to many services is limited by long waiting times, which has been the main reason for unmet needs in Slovenia for many years. The gap in unmet needs between the first and fifth income quintiles, which is relatively small compared to other EU countries, has narrowed slightly compared to 2021. One reason for this is the public healthcare system, which is accessible in terms of affordability. However, both the financially weak and the better off have to contend with long waiting times.
The unmet needs for dental examination in Slovenia are also linked to waiting times. In 2022, unmet needs for dental examination decreased significantly but remained above the EU average. In 2023, 4.0% of the population reported having such unmet needs; the main reason was long waiting times for dentists in the public health network.
6. Avoidable mortality
Avoidable mortality, which declined in 2011–2019, increased in 2020 as a result of the epidemic, though less sharply than the EU average. The rate of avoidable mortality consists of (i) preventable mortality that can be avoided through effective public health and prevention interventions at the primary level and (ii) treatable mortality (avoidable by healthcare interventions). Avoidable mortality declined in 2011–2020 (to 268 deaths per 100,000 people, which is below the EU average) by almost twice as much as the EU average (by 64 deaths; EU: 38 deaths). In 2020, it deteriorated sharply due to the epidemic (by 23 deaths; EU: by 28 deaths). In addition to the direct deaths from COVID-19, the deterioration is also associated with indirect consequences caused by interruptions in preventive and curative healthcare.
Preventable mortality again decreased at a rate similar to the EU average in 2020 and remained above the EU average. In 2020, the number of deaths per 100,000 people that could have been avoided in Slovenia through effective public health and prevention interventions increased by 26 (the same as the EU average). Most preventable deaths are related to a high prevalence of unhealthy lifestyles, as the main causes of deaths are lung cancer (smoking) and alcohol-related diseases. The decrease in the death rate before the epidemic can be attributed to the strengthening of primary prevention interventions focusing on smoking, alcohol consumption, nutrition, physical activity, screening programmes and counselling (OECD/EOHSP, 2021).
Treatable mortality also decreased in 2020, which indicates relatively effective healthcare from the aspect of treatment. In 2020, fewer people died from causes that could have been avoided through timely and effective healthcare interventions compared to 2019 (including through screening programmes and treatment) (the number increased in the EU on average). The indicator points to effective healthcare in terms of treatment, particularly with regard to the relatively lower expenditure on health than in countries that reach comparable results. The main causes of death were heart disease and colorectal cancer, followed by strokes and breast cancer.
7. Overweight and obesity
The share of overweight or obese adults in Slovenia increased to 56.6% in 2019, surpassing the EU average. According to the EHIS survey, in 2019 (latest available data), the majority of EU Member States reported lower rates of overweight or obesity among individuals with higher education levels, while rates were higher among those with lower education levels and among women (Eurostat, 2024). Over the period analysed, the proportion of overweight or obese adults in Slovenia and the EU average rose by 1.6 p.p., while the proportion fell significantly among men with a low level of education, who were the largest risk group before the last survey. A high share of overweight or obese people can be associated with poor eating habits and excessive alcohol consumption. In 2020, the average annual alcohol consumption per capita was 9.8 litres in Slovenia, which is in line with the EU average, but 23% of adults reported heavy episodic drinking (EU: 19%) (OECD, 2022d). Overweight and obesity are important risk factors for the development of chronic conditions and premature mortality. Cardiovascular diseases are the main cause of mortality in Slovenia and in most developed countries. Obesity can, moreover, have not only medical but also socio-economic consequences (social exclusion, lower income, higher unemployment, more working days lost and early retirement).
According to the SHARE survey, which is conducted among people over the age of 50, around 70% of people in Slovenia were overweight in the three periods observed from 2013 to 2020, which is significantly above the EU average. The most recent SHARE survey, conducted partly before the epidemic and partly in the summer of 2020, found almost the same proportion of overweight (71%) among those aged 50 and above as the previous two surveys (46% overweight and 25% obese people). Compared to Slovenia, the average share of overweight people in the EU-27 included in the last SHARE survey declined, to 63% (of whom 40% were overweight and 23% obese). Switzerland had the lowest proportion of overweight or obese people (51%), while Malta had the highest (83%). In Slovenia, the proportion of overweight or obese individuals in all observation periods was highest among those with upper secondary education, while the proportion was lowest among those with a high level of education. The gap by educational attainment has widened since 2013 among those above 50 years of age, due on the one hand to a decline in the share among those with a high level of education and on the other to an increase in the share among those with a low level of education.
8. Health expenditure
After stagnating in relation to GDP for several years, health expenditure has increased since the outbreak of the epidemic. Slovenia entered the epidemic with a severely underfunded and understaffed health system. Total health expenditure remained at around 8.5% of GDP between 2009 and 2019, although demand has risen rapidly due to the ageing population, the introduction of new health technologies and the population’s increasing expectations in the area of healthcare. The problems have resulted in a rapid increase in waiting times and unmet needs for medical examinations, which were exacerbated by the epidemic (see Indicator 3.5). In 2020–2022, the high expenditure related to the COVID-19 containment measures was largely financed from the state budget, meaning that state and municipal budget expenditure as a share of current health expenditure increased from 4.2% in 2019 (EUR 173 million) to as much as 12.7% in 2021 (EUR 626 million), followed by, according to preliminary estimates, a decline to 9.2% in 2022 (EUR 482 million). The share of total current public expenditure in total expenditure increased from 72.8% in 2019 to 74.3% in 2022.
From 1 January 2024, a new mandatory healthcare contribution was introduced to compensate for the funds lost due to the abolition of complementary health insurance. Complementary health insurance (CHI) was to cover all co-payments for healthcare until the end of 2023. In 2022, the CHI contribution to total healthcare expenditure amounted to 12.1% or EUR 632.7 million, according to the preliminary estimates by SURS. From 1 January 2024, a new mandatory healthcare contribution of EUR 35 was introduced, which will be indexed to the growth in the average gross wage in 2024 for the first time in March 2025 (see Section 3.1, Box 5). This will lead to an increase in the proportion of public health expenditure to around 86% in 2024, one of the highest shares in the EU.
9. Expenditure on long-term care
In 2021, the share of public expenditure on long-term care (LTC) increased significantly for the third year in a row, but as a share of GDP it was still below the EU average. Already in 2019, the share of public expenditure on LTC increased sharply in the structure broken down by financing schemes, mainly due to the adoption of the Personal Assistance Act (ZOA, 2017), which significantly increased public financing for LTC at home. In 2020 and 2021, public expenditure on LTC further increased, partly due to the employment of additional staff in nursing homes and wage supplements related to the epidemic and partly to rising expenditure on personal assistance: the number of personal assistants and recipients of the communication allowance increased significantly (from around 1,000 at the beginning of 2019 to almost 6,000 at the end of 2023). International comparison shows that public expenditure on LTC in 2021 (latest data available) amounted to 1.8% of GDP on average in the EU, while in Slovenia it was 1.1%. There are large differences between countries, with the highest expenditure in 2021, between 2% and 4% of GDP, recorded by the Netherlands, Sweden, Germany, Denmark, Belgium, Finland and France. In addition to the different levels of economic development, these differences also reflect differences in LTC systems, demographic factors and life patterns, particularly regarding the role of family and informal care. In Slovenia, a new LTC act came into force in 2024, providing additional public funding and accelerating the development of LTC at home (see Box 6).
The share of the health component of LTC expenditure in the structure of health expenditure is only 70% of the EU average. Despite the very rapid increase in 2019–2021 (by 12% in real terms), expenditure on the health component of LTC is still much lower in terms of EUR PPP per capita than the EU average (2021: 70% of the simple average and only 50% of the weighted EU average) and 3 to 4 times lower compared to more developed countries. These countries have increased their public funding for LTC at home in the last decade and for institutional LTC in 2020 and 2021 in connection with the epidemic.
10. Employment rate
The employment rate (in the 20–64 age group) peaked in the second quarter of 2023 amid persistent labour shortages, surpassing the SDS target for the third year in a row. Along with economic growth and increased demand for labour, demographic trends also contributed to the increase in the period 2013–2019. The increase was halted in the second quarter of 2020 due to the COVID-19 epidemic. Thanks to rapid economic recovery, by the second quarter of 2022, the employment rate already exceeded the levels seen in the same period of 2019. In 2023, it reached an all-time high against the backdrop of persistent labour shortages, although growth decelerated as economic expansion slowed. In the second quarter of 2023, the employment rate of young people (aged 20–29) was still significantly lower than before the epidemic, with a sharp decline in the demand for student labour after the outbreak thereof. The employment rate among older workers (55–64 years) increased slightly in 2020–2022, followed by a slight decline in the second quarter of 2023, widening the gap with the EU average (to 8.3 p.p. in the second quarter of 2023). After several years of increase, the employment rate of people with lower levels of education fell sharply in the wake of the COVID-19 crisis but was again above the 2019 level in 2023. The strong decline of the employment rate during the COVID-19 crisis was due to the high proportion of low-educated workers in the sectors that were most affected by the containment measures during the epidemic. The largest increase in the employment rate compared to the 2019 level was recorded by the Primorsko-Notranjska region and the largest decrease by the Goriška region. In 2023, only the Primorsko-Notranjska and Koroška regions failed to reach the national SDS 2030 target. The EPSR target for 2030 was reached by the Gorenjska (80.8%) and the Osrednjeslovenska regions (80%).
11. In-work at-risk-of-poverty rate
After a decline in the period 2015–2022, the in-work at-risk-of-poverty rate rose again in 2023. According to EU-SILC 2023 (based on 2022 income data), 5.7% of persons in employment aged 18 and over were at risk of poverty. The sharpest increase in the in-work at-risk-of-poverty rate was observed among men, from 5.4% to 6.5%, while among women, it rose from 4% to 4.8%. In the last decade, the in-work at-risk-of-poverty rate in Slovenia was lower than the EU average. In this period, it decreased more markedly in Slovenia compared to the EU average. In terms of age groups, the most significant decline in the in-work at-risk-of-poverty rate in 2013–2023 was observed among people aged 18–24 (from 7.5% to 5.2%). This could be related to the above-average increase in the minimum wage, which impacts a larger proportion of young people compared to other age groups, and the rise in the minimum hourly wage for student employment.
In most countries, the at-risk-of-poverty rate is higher among temporary workers, part-time employees and the self-employed. In 2014–2022, the risk of poverty among temporary workers in Slovenia saw a significant decline (from 14.6% in 2014 to 3.4% in 2022), but it surged to 10.3% in 2023, returning to the level seen in 2017. The at-risk-of-poverty rate for part-time workers reached its lowest level in 2022. However, in 2023, it rose to 13.8%, comparable to levels observed a decade ago. In most EU countries, the in-work at-risk-of-poverty is higher for foreigners than for nationals. In Slovenia, 4.2% of employed Slovenian citizens were at risk of poverty in 2022 (EU: 7.5% of nationals), compared to 13.9% of employed foreign nationals (EU: 19.4%). This means that in Slovenia, the at-risk-of-poverty rate among employed foreigners was 3.4 times higher than among nationals (compared to 2.3 times higher in the EU as a whole).
12. Unemployment and long-term unemployment rates
Amid a persistent labour shortage, the unemployment rate fell to 3.6% in the second quarter of 2023, marking an unprecedented low and significantly undershooting the EU average. In the period 2014–2019, it steadily decreased alongside rising employment levels. The sharpest decline was observed among people with lower levels of education, with similar declines for both men and women. Active labour market policies targeting young people, coupled with increased opportunities for student employment, contributed to a rapid drop in youth unemployment (15–24 years) by 2019. The outbreak of the epidemic and subsequent economic downturn resulting from containment measures led to a surge in unemployment in 2020 (to 5%), albeit mitigated by job-retention measures. The largest increase was recorded among people with a low level of education and among women. Broken down by age, the sharp decline in economic activity hit young people (15–24 years) in the labour market the hardest, especially due to a sharp drop in student work. In the context of the economic recovery in the second half of 2020, unemployment fell again, nearly matching levels seen in the same period of 2019 by the second quarter of 2021 and substantially below the EU average, which had risen. Given the robust demand for labour, this downward trend persisted through 2022 and 2023, encompassing even those groups most affected in preceding years, ultimately reaching historic lows.
The severe labour shortage is also reflected in the decline in the long-term unemployment rate, which reached a historic low in the second quarter of 2023, standing at 1.5%. During the period of economic growth (2014–2019), the situation in Slovenia initially improved solely for the unemployed with shorter periods of unemployment. However, against a background of increasing labour shortages, the number of long-term unemployed has also gradually decreased. Following the onset of the COVID-19 crisis, Slovenia initially experienced a slight increase in long-term unemployment rates. However, by the second quarter of 2023, it had reached its lowest level to date, falling below the EU average. The share of long-term unemployed in the total number of unemployed remained higher than the EU average, mainly due to the low level of overall unemployment in Slovenia.
13. Temporary and precarious employment
The proportion of temporary employment, which fell during the epidemic year 2020, has risen slightly over the last three years, yet remaining lower than in 2019. Companies responded to the outbreak of the epidemic by not renewing fixed-term contracts and reducing the demand for student workers, leading to a significant drop in the number of temporary workers. With the heightened demand for labour in 2021 and 2022, the share of fixed-term contracts initially saw a slight increase, followed by a slight decrease in 2023 due to escalating labour shortages. Similar to trends observed in other EU countries, the prevalence of fixed-term contracts was highest among women. Despite a significant decline in recent years, temporary employment remains notably prevalent among young people (aged 15–24) and exceeds the EU average.
The proportion of precarious employment has been declining since 2018, dropping below the EU average in 2022. This decline was particularly notable in 2021 across all EU Member States, partly due to a methodological change in how persons in employment are recorded. In 2022, the share of precarious employment in Slovenia was the lowest on record (since the first calculation in 2008). The decline was less pronounced on average in the EU than in Slovenia. Despite the declining trend since 2018, precarious employment remains a significant concern, particularly for certain groups of workers (young people, the low-educated, foreign workers and others who do not have a worker representative). In an effort to address certain aspects of precarious work and labour exploitation, the Ministry of Labour, Family, Social Affairs and Equal Opportunities introduced the Working Time Records Act in 2023.
14. Absence from work due to illness
In 2023, absence from work due to illness fell slightly, though it remained notably higher than pre-epidemic levels. In 2023, the proportion of working days lost due to illness fell to 5.9% (after reaching a peak in 2022 at 6.1%) (ZZZS, 2024). The share borne by the ZZZS decreased. The main reason for the decline was the lower number of COVID-19 isolations in 2023, which were still the main factor behind a significant increase in absence from work in 2022. On the other hand, sickness benefits paid by the employer increased significantly in 2023, despite an amendment in force since 1 March, according to which the first 20 working days of benefit are paid by the employer (previously the first 30 days). Notably, there was a rise in the number of short-term absences from work, possibly attributable to the simplified process of obtaining a sick note via online portals or email, eliminating the need for in-person doctor visits. With the exception of 2020, absence from work due to illness has increased since 2014 due to rapid employment growth, later retirement, longer waiting times for medical examinations and an ageing workforce. Absence from work is significantly higher among women (26.7 calendar days) than among men (17.5 calendar days), with the gender gap widening from year to year. This is partly due to the high employment rate among women, who more likely to be absent from work to care for their children than men, and partly to poor regulation of long-term care (informal care is mostly provided by women). In order to improve the situation of informal carers, the possibility of taking up to five days of care leave per year was introduced (ZDR-1D, 2023). Slovenia is also above the EU average in an international comparison: in 2021 and 2022, the number of working days lost reported to international databases increased significantly, to 18.1 compensated working days lost (EU-23: 12.8 years in 2020). In Slovenia, the right to wage compensation for temporary absence from work is not limited in amount or duration, and the accrual rates for calculating the compensation are high compared to other countries (ZZZS, 2023).
15. Inequality of income distribution
The values of income inequality indicators (the Gini coefficient and income quintile share ratio) in Slovenia continue to be among the lowest in the EU. The low income inequality in Slovenia is mainly due to low wage inequality and, to some extent, redistribution through social transfers (cash benefits and subsidies). In 2023, the richest 20% of households had an income that exceeded by 3.3 times that of the poorest 20% (based on 2022 income data), which was within the SDS target for seven years in a row. Detailed data available for 2022 (based on 2021 income data) show that in most EU Member States, the income quintile share ratio (80/20) is higher for people under 65 and lower for people aged 65 and over, while the situation in Slovenia is exactly the opposite. As in Ireland, the differences between these two age groups are very small in Slovenia. However, inequality among people aged 65 and over was still higher in Slovenia than in six other EU Member States, while among people under 65 it was the lowest in the EU. The poorest fifth of households accounted for around a tenth of total disposable income, while the wealthiest fifth accounted for a third.
Despite various crises in 2008–2022, changes in inequality of income distribution were smaller in Slovenia than the EU average. Inequality of income distribution increased slightly in 2009–2014, due to the beginning of the global financial crisis and the subsequent adoption of austerity measures. In 2015, with the rapid growth in economic activity, the phasing out of austerity measures and the rapid increase in the minimum wage, income inequality began to fall again. Unlike the EU average, the first year of the COVID-19 crisis did not affect inequality in Slovenia. However, in 2022 (based on 2021 income data), inequalities saw a slight rise, while they decreased on average across the EU. Similar movements for Slovenia are also indicated by the most commonly used measure of economic inequality, the Gini coefficient, which increased slightly, reaching 0.234 in 2023 (based on 2022 income data) (SURS, 2024b).
16. Median equivalised disposable income
In terms of median equivalised disposable income (EDI), Slovenia still ranks in the middle of the EU Member States. The strong growth in median EDI until 2009 was followed by a period of decline or low growth (2010–2014) as a result of reduced economic activity during the global financial crisis, austerity measures (the ZUJF and ZUPJS) and changes in the allocation of transfers (ZSVarPre), which reduced the equivalised disposable income and thus its median value. With the revival of economic activity (2014–2019) and gradual abandonment of austerity measures, the median EDI in Slovenia and the EU gradually increased, which contributed to the improvement in the living standard of the population. Supported by intervention measures, the growth of the median EDI in Slovenia continued during the COVID-19 crisis, and in 2022 (calculated on the basis of 2021 income) it exceeded the EU average in PPS per capita for the first time.
For people aged 65 and over, the median EDI still lags behind the national average, despite experiencing growth from 2019 to 2022, with slightly larger gender differences than on average in the EU. The increase in median EDI in euros in 2010–2022 was greater in Slovenia than the EU average. As expected, persons in employment in the 18–64 age group recorded the highest EDI in both Slovenia and the EU. The median EDI of the age group of 18 and under is similar to the total EDI, which is mainly a result of policies for protecting the material well-being of children and young people in Slovenia. The median EDI of those aged 65 and over was lowest up to and including 2018, mainly due to the modest increase in the average pension. However, following a significant increase in the average pension, the median EDI for this age group increased significantly in 2019–2022, although it was 16.6% below the overall national average, which is a larger gap than on average in the EU (8.9%). Over the period 2010–2022, the increase in median income for those with a high level of education was significantly lower than that for those with lower and upper secondary education. This was influenced by the progressive reduction in public sector wages during the fiscal consolidation period (2013) and by an increase in the share of young people with tertiary education employed in jobs requiring at most upper secondary or lower level education (see Section 2). The gender gap in Slovenia was slightly larger than the EU average (the median EDI for women was 4.3% lower than for men; EU: 3.6%).
17. At-risk-of-poverty or social exclusion rate
The at-risk-of-poverty or social exclusion (AROPE) rate, which is among the lowest in the EU, increased slightly in the last two years and it remains significantly higher than the EU average for some vulnerable groups. According to the 2023 EU-SILC survey, which is based on 2022 income data, the AROPE rate increased by 0.4 p.p. and was the same as in 2019. The at-risk-of-poverty rate and the severe material and social deprivation rate increased (by 0.6 p.p. each) (see Section 3.3), while the very low work intensity rate remained unchanged. In 2023, around 287,000 people were at-risk-of-poverty or social exclusion, meaning that Slovenia has moved away from the EPSR 2030 target (less than 270,000 people). The AROPE rate for children has been the lowest in the EU for the last four years, while it has been steadily increasing for children of less educated parents, especially for children up to the age of six, which according to the latest data in Slovenia was the highest of all EU Member States. The AROPE rate for the older population also remains above average, increasing the age-related risk gap. The COVID-19 crisis led to a sharp increase in social exclusion in the Obalno-Kraška statistical region in 2021 and 2022 (see Section 3.3.).
The at-risk-of-poverty rate in 2023 rose above the 2019 level, the risk of long-term poverty has risen sharply and the situation of vulnerable groups in society remains a pressing problem. In 2023 (based on 2022 income data), 264,000 people lived below the at-risk-of-poverty threshold. The significant decrease in the long-term at-risk-of-poverty rate in 2022 (by 23,000 persons) was followed by a marked increase in 2023 (to 123,000 persons). According to the latest internationally comparable data from 2022, certain population groups are still at higher risk of poverty than the EU average, in particular single-person households, pensioners, persons aged 55–64, people with low levels of education, tenants, households with low labour intensity, households with severely disabled children and others (see Section 3.3). However, due to the limitations of the EU-SILC survey (IMAD, 2021a), we assume that these statistics do not show the increase in poverty in certain social groups, in contrast to some other analyses: the number of homeless people has been rising for several years, while hardship for foreign workers and migrants is increasing, as highlighted by humanitarian and other organisations and national expert institutions, which also point to the risk of poverty for people with disabilities, the intergenerational transmission of poverty, hidden poverty, and the lack of monitoring and targeted action by the state (EAPN, 2022; Korpič-Horvat et al., 2022; Kump and Stropnik, 2022; Court of audit of the RS, 2021b; Ombudsman, 2023a).
18. Material, social and income deprivation
The severe material and social deprivation rate, which decreased rapidly in 2015–2022, increased in 2023; the prevention of absolute poverty remains a challenge for Slovenia and other EU countries. Since the last revision of the methodology for measuring (severe) material and social deprivation (MSD), which makes the data comparable since 2015, the rates in Slovenia have fallen more sharply than the EU average and reached their lowest level in 2022. In 2023, however, the severe MSD increased (to 2.0%), although it remained lower than before 2020. Around 41,000 people were severely materially and socially deprived and around 10,000 people were exposed to all three forms of social exclusion. Households whose income does not cover the minimum cost of living (absolute poverty) are entitled to social and material assistance: in 2023, an average of 75,572 people were entitled to financial social assistance (FSA), 10,521 to extraordinary FSA and 25,716 to the income supplement among older persons in need (MDDSZ, 2024a). Entitlement and the amount of support (the threshold) depend on the amount set by law every six years, based on the basic amount of minimum income (BAMI). Adequate levels of these social transfers, which must be targeted at those that are unable to provide for themselves, are important to prevent absolute poverty and preserve human dignity (see Section 3.3). Around 150,825 people receive material aid in the form of food and clothing every year, mainly women and children up to the age of 15.
Due to rising prices, the proportion of households in the lowest income quartile facing financial distress in 2023 has approached the level of early 2021, but it remained well below the EU average, where the situation of poor households has deteriorated the most in the last decade. The epidemic and elevated inflation have also led to a deterioration in the financial situation of Slovenian households, which the state tried to contain with numerous measures. As a result of rising prices, the proportion of households in the lowest income quartile that are running into debt or having to draw on savings increased in 2023, but it did not exceed the 2017 peak (see Section 3.3). In 2023, households facing financial distress continued to cover their financial needs to a greater extent by drawing on savings, and the proportion of households running into debt increased slightly.
19. Social protection expenditure
Expenditure on social protection in Slovenia increased in 2020 and 2021 as a result of the epidemic (by 14.2% and 6.5% respectively in nominal terms), with the increase being higher than the EU average (where it increased by 8.3% and 2.4% respectively). In Slovenia, it amounted to EUR 13.1 billion but still lagged behind the EU average, measured as a share of GDP and in purchasing power standards (PPS) per capita (in 2008–2020, it was on average 4.9 p.p. per year lower than the EU average). In PPS per capita, expenditure on social protection reached 72.1% of the EU average in 2021, the highest level since 2009. After the 2008 financial crisis, it fell in relation to the EU due to austerity measures and the introduction of new social legislation, reaching its lowest level in 2016 (66.2% of the EU average in PPS per capita). In terms of individual expenditure areas, Slovenia’s expenditure on the poorest (i.e. expenditure on social exclusion not elsewhere classified) was closest to the EU average, with the level of spending in the period 2008–2021 in Slovenia in PPS per capita almost matching the EU average. The expenditure group that came second closest to the EU average was expenditure on sickness and healthcare (2021: 85.6% of the EU average; 2008–2021: 81.6%).
Old age and sickness/healthcare account for the largest share of social protection expenditure both in Slovenia and elsewhere in the EU, with expenditure on unemployment benefits increasing significantly during the epidemic. In 2021, Slovenia spent 37.9% (EU: 38.1%) on old age and 33.8% (EU: 28.5%) on sickness/healthcare. Expenditure on the former has risen in recent years due to increasing expenditure on pensions (however, as a percentage of GDP, expenditure has not shown an upward trend). Expenditure on sickness/healthcare has increased due to higher expenditure on healthcare (see Indicator 3.8) and on sickness benefits (see Indicator 3.14). In 2020, family/children accounted for the third largest category in expenditure structure both in the EU (7.9%) and in Slovenia (7.4%). Due to the intervention measures taken during the epidemic (reimbursement of wage compensation – temporary lay-off, reimbursement of compensation for part-time work, temporary cash benefits, etc.), unemployment expenditure more than tripled in 2020 and further increased by 14% in 2021. Its share was almost three times larger than in 2019 but remained lower than the EU average (6.3%, 2019: 2.3%; EU: 7.3%, 2019: 4.5%).
20. Housing costs and housing deprivation rate
Housing costs in Slovenia are lower than the EU average due to a high share of owner-occupied flats; similar to the situation across the EU, the burden is highest for people in households below the at-risk-of-poverty threshold. After falling for several years, the housing cost overburden rate remained unchanged at 4.1% in 2022, which is less than half the EU average (8.7%). Nevertheless, in households below the at-risk-of-poverty threshold, it increased by 2.2 p.p. to 23.1% (EU: 33.1%). In Slovenia, more than three-quarters of dwellings is owner-occupied (EU: 69.1% in 2022). As a result, housing costs tend to be lower. Tenants who pay rent at the market price were the most overburdened in 2022 (17.9%; EU: 20.8%), but their costs have fallen since 2016. Housing costs are also influenced by the quality and size of dwellings. Slovenia has a low level of severe housing deprivation (SHD) compared to other EU countries, but one of the highest levels of housing deprivation (HD), although this has decreased since 2014. In 2022, 18% of all households and 27% of households in the lowest income quintile lived in poor housing conditions, with the highest proportion, almost a quarter of all households, in the Pomurska region and Jugovzhodna Slovenia. For several years, the situation has been most severe for pensioners. They often own homes that are too large and/or in poor condition, which can lead to excessive maintenance costs (Kump and Stropnik, 2022). One of the main reasons for poor housing condition is the old and poorly maintained housing stock. About 80% of dwellings were built before 1990 and only about 2% (17,232 dwellings) between 2016 and 2021, with the highest share in the Osrednjeslovenska region and the lowest in the Zasavska region.
21. Experience of discrimination
Following a gradual decline from 2009 to 2019, the share of people who reported experiencing discrimination or harassment moved away from the SDS target in 2023, yet it remained among the lowest in the EU. The most commonly cited reasons for discrimination were age (4%), gender (3%) and general physical appearance (3%). Discrimination on the grounds of disability, religion or beliefs, political opinion, or socio-economic situation was reported by 2% of respondents, discrimination on the grounds of ethnic origin or skin colour by 1% of respondents. In general, discrimination based on most of the aforementioned personal circumstances was below the EU average, while discrimination on the grounds of general physical appearance, disability, and religion or belief was as common as the EU average. Experience of discrimination was more frequently reported by individuals who considered themselves as being part of a minority group. Notably, both in Slovenia and across the EU, the share of respondents who felt discriminated against based on age rose the most compared with 2019 (by 2 p.p.). This emphasises the urgent need to step up efforts to combat ageism, which is reflected in social norms, policies and practices of institutions that unfairly restrict opportunities and systematically disadvantage individuals because of their age (EESO, 2023; WHO, 2021).
In Slovenia, the most mentioned circumstances where people felt discriminated against were at work and in a public space, with the largest disparity from the EU average observed in access to healthcare services. In 2023, 26% of respondents stated they had experienced discrimination at work, a decrease since 2019 (33%) and roughly in line with the EU average. Discrimination at work was experienced by 29% of men and 22% of women and was most frequently reported by the 25–34 age group. A lower proportion of respondents in Slovenia (25%) reported discrimination in a public space than the EU average (32%). In Slovenia, the proportion of the population who felt discriminated against when using or requiring healthcare services was 20%, one of the highest in the EU. Significantly more women (27%) than men (12%) reported experiencing this type of discrimination, with respondents in the 65–74 age group being the most affected.
1. Emission productivity
Greenhouse gas (GHG) emissions fell as expected during the epidemic due to lower economic activity, then rose slightly with the economic recovery, and in 2022 fell to their lowest level in two decades due to lower coal consumption in the thermal power plant. They amounted to 15.6 million tonnes of CO2 equivalent. This was 2.8% less than a year earlier, 1.9% less than in 2020 and 24.2% less than the peak in 2005. The main reasons for the overall annual decrease were lower emissions from the energy sector (by 19%), due to lower coal consumption in the thermal power plant during the energy crisis, and from industrial processes (by 7%). Emissions from most other sectors also decreased. Emissions from two sectors increased: transport, which accounts for about one-third of emissions (by 11%), to 5.8 million tonnes of CO2 equivalent, and industrial fuels (by 2%). Emissions from the EU ETS sectors, which have been declining more sharply over the longer term, fell by 14%. In contrast, emissions from non-EU ETS sectors increased by 3.5%. According to Eurostat (2024) estimates, the overall decline continued in the first half of 2023. According to these estimates, emissions also fell in the EU, both in 2022 and in the first half of 2023.
Due to lower emissions and due to economic growth, emissions productivity rose again in 2022 but was below the EU average, although the gap narrowed by 4.4 p.p. to 7.4% in 2021. Productivity growth, as measured by the ratio of GDP to GHG emissions, which had stalled in 2008–2014 with the global financial crisis, has since accelerated in Slovenia and at the EU level and was also higher in 2022. In 2021, the gap with the EU average narrowed (latest available data). In that year, Slovenia generated 7.4% less GDP per unit of GHG emissions than the EU average, which is the smallest gap in the period analysed since 2005. According to preliminary estimates, this gap persisted in 2022.
2. Energy efficiency
Primary energy consumption, which had initially increased after falling during the epidemic, decreased again in 2022, due to the energy crisis. After a decline during a period of subdued economic activity in 2009–2013, changes in thermal power generation and reduced demand for heating in certain years, the development was affected not only by rising energy consumption in transportation, but also by other factors. These include, in particular, the annual river level fluctuations and the schedule of regular overhauls at the nuclear power plant. In 2019, energy consumption declined again as economic growth slowed, followed by an even sharper decline in 2020, when containment measures were in place, with the decline being most pronounced in transportation. Energy efficiency thus improved, also due to the lower activity during the two crises (the 2009 global financial crisis and the 2020 COVID-19 crisis), which made it easier for Slovenia to meet the targets for both primary and final energy consumption. As the containment measures were gradually lifted, energy consumption in transportation increased sharply (by 14%) in 2021, contributing most to the increase in total energy consumption. In 2022, however, total energy consumption fell by more than 2% despite the continued strong growth in transport. Due to lower power plant output as a result of drought and coal savings, energy consumption for transformation (conversion of coal and hydropower into electricity) fell sharply. Industrial and household consumption were also lower, due to high energy prices (especially for gas and electricity).
The gap in energy productivity between Slovenia and the EU average widened by 2 p.p. to 9% in 2022. The growth in energy productivity (the ratio of GDP to gross available energy) halted only briefly in the early years of the global financial crisis and was one-fifth below the EU average in 2011. Since then, it has mostly grown faster than the EU average, so Slovenia’s gap has narrowed, especially in 2021, when GDP growth was higher (post-COVID recovery), while energy consumption growth was half that of the EU average. In 2021, the gap was around 7%, the lowest level since 1995, but it rose to 9% in 2022. We assume that amid GDP growth and lower energy consumption, energy productivity improved further in 2023.
Final energy consumption, which has been decreasing since 2005 at a rate similar to the EU average, also fell slightly in 2022, although the decline in Slovenia was less pronounced. In the industry sector, where it had been falling since 2008, mainly due to the modernisation of aluminium production, it had risen in recent years before falling in 2022 in the context of the energy crisis, reaching its lowest level in the analysed period. Household consumption also decreased, as a result of milder winters, energy renovation of buildings, installation of heat cost allocators and more efficient heating appliances. Consumption in the transport sector, which rose due to increased transit following EU enlargements, remained high despite fluctuations, then declined during the epidemic, followed by an even sharper increase in 2021 and 2022.
3. Share of renewable energy sources
The share of renewable energy sources (RES) in final energy consumption, which had been rising only modestly in Slovenia after 2005, fell below the EU level for the first time in 2022, as the use of wood and biofuels declined. In the period 2005–2022, the strongest increase in the share of RES consumption was seen during the 2009 global financial crisis, when total final energy consumption fell sharply while RES consumption remained almost unchanged, which was also the case in 2020 during the epidemic. In both years, it increased by more than 2 p.p. Between the two crises, when wood consumption for heating and the use of hydropower fluctuated, did not increase significantly. In 2022, it decreased by 1.7 p.p., to 22.9%. Between 2005 and 2022, total RES consumption in Slovenia increased by only 8%, while the EU average recorded a much stronger increase of 108%. In 2022, Slovenia failed to reach its RES target for the third year in a row (at least 25% from 2020 onwards), and this time it bought the remaining share from Croatia (previously from the Czech Republic). Besides Slovenia, also a few other countries had to buy their shares in 2022, but they have made significantly greater efforts to adopt RES since 2005, meaning that the RES consumption in these countries has increased several-fold. Due to the insufficient progress to date, Slovenia is still far from reaching the targets set for the coming years. We estimate that the share of RES increased slightly in 2023 with the increased use of hydropower and the normalisation of the pellet market.
Slovenia has a high share of traditional and a low share of other renewable sources in total RES consumption. Traditional RES (wood and hydropower) still account for above 80% of total RES consumption in Slovenia, compared with below 60% in the EU overall. The extensive use of wood for heating is generally desirable, but if not properly used, it can also be unfavourable from the aspect of particle pollution. The share of other RES (wind, solar and geothermal energy, biofuels, heat pumps, and biogas), however, is among the lowest in the EU. The gap is the widest in the use of wind farms: their share in Slovenia is 0.05% compared to the EU average of 16.4%.
Support for electricity generation from RES was further reduced in 2023, mainly due to high reference market prices of electricity. Total support amounted to around EUR 53 million, down by one-quarter year-on-year. Support for solar power plants accounted for 78%, support for biomass power plants for 12%, and support for biogas plants and all other power plants for 10% of all support. The amount of support per unit of electricity generated by solar power plants was still more than twice as high as for other renewable sources.
4. Modal split of transport
Freight traffic in Slovenia is quite dense, owing to the country’s transit location, but since a lot of freight is also transported by rail, the road transport share is relatively small and much lower than the EU average. Over time, Slovenia has seen a decline in the proportion of road freight transport, dropping to less than two-thirds, while the EU average has risen to over three-quarters. In 2021 (latest available data), however, the trend shifted. The volume of road freight transport in Slovenia increased more than that of rail transport, while the increase in the EU average was slightly lower. In the period 2005–2021, road transport volumes in Slovenia increased by more than one-third (twice as much as the EU average), while rail transport volumes increased by more than 50% (compared to only a few percent in the EU as a whole). Since 2008, transport performed by Slovenia’s main railway company faced increasing competition from foreign transport companies, which already accounted for around 17% of total freight transport on the Slovenian rail network in 2022. Road freight transport increased in Slovenia particularly due to the rising transit traffic – more than three-quarters of road transport in Slovenia is thus already accounted for by foreign hauliers due to the country’s small size and transit location. The volume of total freight transport per inhabitant is relatively high in Slovenia (30% higher than the EU average in 2021, being higher only in six other EU Member States). Within that, transport by road per inhabitant is a good one-tenth higher and transport by rail 2.5 times higher than the EU average. A large part of the rail transport is linked to the Port of Koper and will be further strengthened in the future by the modernisation of the Divača–Koper railway line and some other sections, which will also be financed from RRP funds. However, the line’s capacity has been or will be reduced during these works. We estimate that the share of road freight transport further increased slightly in 2022 and 2023, in 2023 mainly due to a decrease in railway transport volume.
Transport by passenger car is the predominant mode of passenger transport in all EU Member States, but in Slovenia its share is among the highest. This can in part be attributed to the diversity of its landscape and its dispersed settlements, which – in spite of subsidies – limit a greater extension of the public passenger transport network and its profitability. More people have difficulty in accessing public transport than in the EU overall (according to the latest survey in 2012, one-quarter in Slovenia against an average of one-fifth in the EU). With such a passenger transport structure (where public transport is used relatively little in comparison with transport by car), the share of transportation expenditure in total household expenditure is also higher than the EU average (2020 – SI: 18%, EU average: 11%). In 2020, Slovenia faced huge contraction of public passenger transport due to the epidemic-related restrictions, leading to a further decline in the already modest share of public transport in overall passenger transportation. With the normalisation of public transport, this share increased slightly in 2021 and then again in 2022 and 2023. These trends have also been present in the EU in recent years.
5. Resource productivity
Resource productivity has fluctuated considerably over the years, particularly in response to changes in the construction industry, with the gap to the EU average remaining largely unchanged over the past decade. The most notable increase in resource productivity, expressed as the ratio of GDP to material consumption, occurred in 2007–2012 amid a decline in construction activity. In that period, the decline in construction activity was related to the global financial crisis and the completion of the motorway network (mostly completed by 2009), while the consumption of non-metallic minerals, which had previously accounted for more than two-thirds of total material consumption, dropped significantly. Amid lower consumption of non-metallic minerals, the decline in total material consumption after 2011 was also significantly influenced by changes in thermal power generation (lower coal consumption). In 2019, when growth in construction activity again slowed significantly, the consumption of non-metallic minerals fell by almost 15%, which led to a significant improvement in resource productivity. In 2020, containment measures primarily resulted in a significantly lower consumption of liquid fuels, while total material use declined less sharply than GDP, leading to a slight deterioration in resource productivity. In 2021 and 2022, consumption of non-metallic minerals again increased heavily (by 21% and 8% respectively), reaching its highest level since 2009 in 2022. The growth in total material consumption has exceeded GDP growth (calculated at constant prices), meaning that material productivity declined in 2022. Since resource productivity in Slovenia increased less than in the EU (calculated based on GDP in PPS), Slovenia’s gap with the EU average widened to 13%. We estimate that resource productivity in 2023 further decreased slightly amid high activity in construction and low GDP growth.
Slovenia’s self-sufficiency in materials, which is usually slightly above the EU average, fell in 2022 and was below the EU average due to a sharp increase in net imports of sand and gravel. Slovenia is well supplied with certain resources. In the breakdown of domestic extracted resources, in 2022 more than 65% was sand, gravel, limestone and gypsum. Other important domestic resources were agricultural products, lignite and wood. Net imports accounted for around 15% of total material consumption, which is slightly more than a year earlier. The bulk of net imports are usually energy products, iron ore, non-ferrous metals and agricultural products, while the share of sand and gravel increased in 2022. In terms of total net exports, only net exports of wood, particularly logs, have been relatively strong since 2014, with an increase in sanitary felling due to the glaze ice damage, windthrows and forest pests. Sanitary felling declined significantly in 2018 and 2019 before increasing slightly again in 2022. High net exports of raw materials otherwise decrease domestic material consumption in the calculation, but from the point of view of efficient use of resources, they can create higher value added being used in the domestic manufacturing sector.
6. Waste
In 2022, the total amount of waste generated increased, while non-mineral waste decreased and reached an all-time low per capita. The total waste generated in 2022 amounted to 11.6 million tonnes, marking an increase of almost one-quarter compared to the previous year. The increase was mainly due to a rise in the amount of excavated building materials, leading to a one-third increase in the amount of mineral (mainly construction) waste, which (due to its high specific weight) accounts for the largest share in the waste structure. In 2022, the amount of non-mineral waste generated totalled 2.4 million tonnes, which is a decrease of 5% compared to 2021. On a per capita basis, 1.4 tonnes of waste were generated, 12% less than in the previous year and one-fifth less than a decade ago. The amount of municipal waste, which accounted for 9% of all waste and the per capita generation below the EU average, fell by 4% to 496 kg per capita. Households generated 307 kg of waste per capita, totalling almost 52,000 tonnes less than in 2021. The amount of hazardous waste, which has increased in the long-term, fell by 0.1% in 2022, with its share in total waste generation dropping to 1.2%. Food waste fell by 2% or 1 kg per capita compared to a year earlier.
The increase in waste recovery was greater than the increase in waste generation. In 2021, 11 million tonnes of waste underwent final processing, marking a 36% increase compared to the previous year. Due to the large increase in mineral waste, backfilling emerged as the most favoured option in the waste management hierarchy (71%), while the shares of recycling (27%) and incineration for energy recovery (1%) decreased. The share of recycled non-mineral waste, which had risen rapidly since 2010, followed by a slight decline in 2022, is above the EU average. The same applies to the share of recycled municipal waste, which increased also in 2022. The amount of waste landfilled, which is the least preferred waste management option, is declining, and the amount of total waste landfilled in 2022 was the lowest since 2018. Landfilling of municipal waste, around three-quarters of which was collected separately, increased by one-fifth to 32 kg per capita in 2022.
7. Environmental taxes
In 2022, environmental taxes were almost at the same level as in the previous year in nominal terms, but as a proportion of GDP they fell to their lowest level so far. Several years of growth in revenues from environmental taxes was interrupted in 2018 (-1.2%). In 2020, revenues declined sharply (-14.3%) due to lower economic activity during the COVID-19 epidemic and the reduction in excise duties on petrol and diesel. Since then, revenue has increased slightly in nominal terms, but it has not yet reached the 2019 level. As part of the measures to mitigate the effects of rising energy prices, excise duties on energy products were further reduced in 2022, the environmental tax on air pollution from CO2 emissions was temporarily waived, and the RES and CHP contributions were reduced. According to the preliminary state budget data for 2023, revenue from excise duties on energy was close to the 2019 level. Although excise duties (on diesel, heating oil and unleaded petrol) largely increased in 2023, they were still lower at the end of the year than at the end of 2018. The long-term reduction in excise duties on energy products was primarily aimed at price reduction rather than addressing environmental policy or climate change-related objectives. Last year, the share of environmental taxes in GDP and in total tax and social security revenues reached a historic low (2.87% of GDP or 7.58% in terms of total taxes and contributions).
Slovenia is still in the top third of EU Member States in terms of the burden of environmental taxes as a share of GDP. In 2022, Slovenia’s environmental tax revenues as a share of GDP were 0.85 p.p. higher than the EU average. The gap almost halved compared to 2013, when it was widest. The high share in Slovenia is due to high revenues from energy taxes, which is related not only to the extensive use of fuels for road transport and Slovenia’s transit location, but also to dispersed settlement and the poorly developed public transport infrastructure.
8. Ecological footprint
The ecological footprint, a composite indicator of environmental development, remains relatively high in Slovenia despite a decline and exceeds the EU average. The ecological footprint is a quantitative measure of how much bioproductive area a population would require to produce the resources it consumes and to absorb the waste it generates. It is expressed in global hectares (gha), a standardised unit of biologically productive area. Its dynamics show a strong correlation between economic growth and environmental pressures, and the bulk of its structure was carbon footprint, due to the high consumption of fossil fuels. The ecological footprint, which in Slovenia is about twice the global average and above the EU average, increased in the period 2014–2019, then decreased, as expected, during the COVID-19 epidemic and, despite economic growth, fell slightly in the following two years, to 4.8 gha/capita according to the latest estimate. As the European average has increased in recent years, the gap has narrowed. However, even after recent progress, which has slightly compensated for the slower progress in narrowing the gap in the period 2000–2019, Slovenia remains in the upper half of European countries in terms of ecological footprint, though it moved close to the EU average. As economic development and maintaining lifestyles still require relatively large amounts of natural resources and lead to significant pollution, this is not sustainable and is not in line with the relatively ambitious SDS 2030 target (3.8 gha/capita), which is becoming increasingly challenging due to the sluggish pace of progress.
Since the ecological footprint is relatively high, so is the ecological deficit, i.e. the negative difference between the ecological footprint and biological capacity. Biological capacity, or biocapacity, refers to the biologically productive areas that are capable of self-regeneration. Like the ecological footprint, it is expressed in global hectares, with each global hectare producing the same amount of biological material. Slovenia’s biocapacity is stable and does not change significantly from year to year. Three-quarters of it is accounted for by forests, which despite their large surface area cannot sufficiently absorb all carbon dioxide emissions. The share of other areas, particularly arable land and fishing ground, is modest compared with the EU average. According to the latest data, Slovenia's ecological footprint (4.8 gha/capita) is twice as large as its biocapacity to replenish resources. Slovenia’s ecological deficit (of 2.3 gha/capita) is thus significantly higher than the world average (of 1.0 gha/capita) and the EU average (of 1.4 gha/capita).
9. Utilised agricultural area
Utilised agricultural area (UAA), which in Slovenia accounts for a significantly lower share of total land than in the EU, has been stable in the last decade after a long period of decline but is expected to increase slightly by 2030 according to the SDS target. UAA, which is crucial for ensuring food security, covered around 479,400 hectares in 2022, which is 23.6% of the total national territory. This is about the same as in 2021 and a decade ago. Before that, the decline was more pronounced, due to the abandonment of agriculture, overgrowth of land by trees, and conversion to built-up land, meaning that in 2022 it was 15% lower than at the time of the country’s independence. Reducing overgrowth and fallow land and permanently protecting especially the best agricultural land from land conversion also remain priorities in efforts to achieve the SDS 2030 target of more than 24% of UAA in the country’s total national territory.
In terms of ensuring conditions for local food production, the modest share of arable land is of particular concern. In terms of arable land (fields), the most important type of land from a food security perspective, Slovenia is one of the four EU Member States with the lowest amount per capita. Arable land in Slovenia covers about 36.9% of UAA or 8.4 ares per capita, while the EU average is 60.6% of UAA or 21.7 ares per capita. Less than 3% of this land is used for growing vegetables and almost one-third for growing fodder crops. The latter are also produced on permanent grassland, which covered the most, around 60%, of UAA. Six percent of UAA is accounted for by permanent cropland, where vineyards and orchards predominate. The UAA structure does not change significantly from year to year.
Organic farming, the most desirable form of agricultural production from an environmental perspective, is about equally widespread in Slovenia as on average in the EU, and its adoption is steadily rising. About 5% of all agricultural holdings were involved in controlled organic farming in 2022. They accounted for 11.1% of total UAA, which is 3% more than in 2021. Again, permanent pastures and meadows dedicated to fodder production account for the largest share (79%). However, this is not in line with demand, which is highest for organically produced fresh fruit and vegetables and processed vegetarian foods (KIS and MKGP, 2023a). Given Slovenia’s natural conditions, i.e. the high proportion of farms in mountainous and other remote areas where intensive conventional farming is not possible, there remains considerable potential for further expansion of organic production in the country.
10. Agricultural intensity
Agricultural production in Slovenia is not among the most intensive, while stocking density is higher than the EU average. According to preliminary estimates by KIS and MKGP (2023b), the total volume in 2023 was modest for the third year in a row: 2% higher than in the poor year 2022 and around a tenth lower than the last five-year average. Crop production increased by around 5% (yields of most crops remained below average), while livestock production declined by around 1% due to lower fodder production and milk production. A comparison with the EU average for the two most important crops does not give a uniform picture: wheat yields tend to be lower, while maize yields are higher. Stocking density, as measured by the livestock units (LUs) per hectare, is higher than the EU average due to natural conditions, while average milk yields remain relatively low. This structure results in a slightly higher share of GHG emissions from agriculture than the EU average.
The downward trend in the consumption of mineral fertilisers and plant protection products (PPPs) that has been observed in recent years was even more pronounced in 2022 (the last year for which data is available), under the influence of relatively high price increases. The consumption of mineral fertilisers containing nitrogen, phosphorus and potassium (NPK) decreased by 13% in 2022, while N and P consumption per unit area was close to the EU average. In terms of sales of PPPs, which have fallen for the fourth year in a row, Slovenia is in the upper middle range of EU Member States when calculated per unit of arable land. Consumption depends heavily on the type of crop grown, the weather conditions and, consequently, the occurrence of diseases and pests.
11. Intensity of tree felling
The intensity of tree felling, which had been relatively high for several years due to the sanitary felling after the glaze ice of 2014, returned to roughly pre-glaze ice levels in 2021, followed by an increase of 12% in 2022 due to forest fires and a renewed increase in sanitary felling. The exceptionally dry and warmer-than-average conditions in 2022 led to an excessive spread of wood pests and an above-average number of forest fires, including a particularly large one in the Goriška Karst region. Sanitary tree felling has increased by one-third and about half of this was on account of damage from pests. Felling for tree-tending purposes, which accounts for the largest share under normal conditions, increased by 5%, but its share in total tree felling fell from 70% to 65%. The total tree felling accounted for 64% of that allowed under forest management plans, which is better than in the previous year (57%). The intensity of tree felling (annual felling in relation to the annual wood increment) also increased by 6 p.p. to 52%. However, the sanitary felling has not yet allowed the carbon sinks in the forests, which made the largest contribution to the total sinks before the glaze ice damage, to return to their natural level.
Growth in production of roundwood or unprocessed wood was 2 p.p. lower than the growth of tree felling in 2022, reflecting slightly lower yields, and, amid lower wood imports, net exports increased by one-third. Raw wood production, which was at its lowest level in 2021 since the glaze ice damage, increased by around one-tenth in 2022 and was still one-fifth higher than before the glaze ice damage. After the glaze ice damage, it increased in most categories, especially for the highest quality and highest value-added timber. Roundwood exports, which were relatively high during the period of large-scale sanitary felling and only returned to around pre-glaze ice levels in 2020 and 2021, increased by 3% in 2022. As timber imports fell at the same time, partly due to the export bans imposed in some exporting countries during the energy crisis, the foreign trade surplus increased significantly. The majority of foreign trade is conducted with Italy, Austria and Croatia. The relatively high net export of this high-quality raw material represents an untapped potential to create higher value added in the downstream forestry–timber chain, which is already relatively underutilised in Slovenia given the high forest stock and abundant timber reserves.
12. Quality of watercourses
The quality of Slovenian watercourses, as measured by biochemical oxygen demand, is high. Their cleanness, which was close to the EU average at the beginning of the previous decade, has improved significantly since 2005. For several years, Slovenia has been among the top EU Member States for which data are available. The concentrations of nitrates in groundwater and phosphates in rivers, which in excessive quantities degrade water quality, have also fallen in the long term and were below the EU average. The decline in organic pollution, which is usually caused by municipal and industrial wastewater discharges and runoff from agricultural land, is a consequence of a significant improvement in wastewater treatment and abandonment of certain economic activities which were polluting watercourses with wastewater in previous years.
About one-fifth of wastewater in total and almost three-quarters of municipal wastewater is treated before discharge. In Slovenia, which is, due to its diverse natural conditions, fairly rich in water resources and has a relatively high amount of freshwater resources available per capita, a total of 827.5 million m3 of water was abstracted in 2022, 11% less than a year before. Most of this water comes from surface water sources (for industrial use). Only one-fourth was abstracted from groundwater sources (intended for the public water supply system and irrigation). A total of 848.2 million m3 of wastewater was discharged into the environment. The share of water treated before discharge increased from 11% to 20% between 2015 and 2022, while most of the untreated water is only thermally polluted due to its use in hydroelectric power plants. In 2022, 72% of the municipal wastewater from sewers was treated in wastewater treatment plants before being discharged into the environment.
13. Ambient air quality
The quality of ambient air in Slovenia is closely related to particulate matter (PM) pollution, which is mainly a consequence of inappropriate burning of wood biomass and poor ventilation of some areas. Total PM10 pollution is mainly caused by emissions from the use of fuels in households and services (about 60%), to a large extent owing to households’ outdated wood biomass furnaces and the often unfavourable weather conditions in the poorly ventilated basins and valleys of the continental part of Slovenia (ARSO, 2024b). Ambient air quality (particulate matter pollution) did not deteriorate during the energy crisis (2022) and remained at a similar level to 2021, mainly due to slightly less favourable weather conditions for dilution of emissions during the heating season. In Slovenia, the finest PM2.5 particles, which are the most harmful to health and cause around 1,200 premature deaths per year, account for more than 70% of total particulate matter pollution (EEA, 2024). The average urban population exposure to particulate matter air pollution has decreased in recent years, due to the reduction of industrial emissions and milder winters. The introduction of much more ambitious standards related to the adoption of the proposal for a recast Directive (EC, 2022b) will require even more radical measures to improve air quality, particularly in energy supply for heating.
Another problem that remains is the locally high presence of ground-level ozone. As the formation of ozone requires sufficient sunlight, the excessive concentrations of ozone, in contrast to particulate matter, mainly occur during the summer months. They are primarily the result of road traffic, the main source of ground-level ozone precursors, the amount of which has decreased in the last decade and in 2021 was close to the EU average per capita, placing Slovenia in the top third of Member States (ARSO, 2024d). In Slovenia, the ambient concentration of ozone is significantly affected by transboundary air pollution and is highly dependent on winds from the west. It is highest in the Primorska region, although it is also high in most other areas, even in rural areas and at higher altitudes. Measurements of ground-level ozone show that the long-term target values have been exceeded throughout Slovenia, but no clear trend can be seen from the multi-year data series due to the strong dependence on weather conditions.
14. Functionally derelict areas
The total number of functionally derelict areas (FDAs) was lower in 2023 than in the two previous censuses, which is due to the revitalisation of some existing areas and a slowdown in the creation of new ones. According to the last census, at the end of 2023, the average size of FDAs has also decreased by around one-tenth over the seven years, from 3.2 ha to 2.9 ha. The degree of abandonment of FDAs has also changed. There are fewer completely abandoned areas and more moderately abandoned (50–90%) and partially abandoned (less than 50%) FDAs. Overall, one-fifth of FDAs are partially abandoned, with the Zasavska (33%) and Koroška (30%) regions having the highest proportion of partially abandoned FDAs. This indicates a high demand for land and a gradual process of establishing new activities, which is desirable. However, as such revitalisations are often not planned, comprehensive sustainable spatial solutions are more difficult to achieve in these areas.
As far as the ownership structure of FDAs is concerned, the proportion of areas owned by municipalities has increased. One of the key factors in the revitalisation of FDAs is the ownership structure. Since 2017, the number of municipally owned FDAs has increased, which facilitates revitalisation through public tenders and projects and access to various sources of funding (e.g. cohesion funds, RRP funds, React-EU, etc.). On average, one-tenth of FDAs are municipally owned (7% in 2017), with the highest share in the Pomurska region (around 30%, compared to 15% in 2017). The revitalised areas are mostly intended for public use (retirement homes, community spaces, cultural centres, etc.).
The new activities in the revitalised FDAs are dominated by industrial, craft and storage activities and warehousing, although areas for housing are also common. An initial analysis (FF UL, 2024) shows that around 2,400 new flats have already been built and occupied in 55 FDAs, around 1,700 flats are under construction in 20 FDAs, and around 5,000 more are planned in at least 76 FDAs. The Osrednjeslovenska region stands out in this respect (29 locations), followed by the Savinjska region (7) and the Obalno-Kraška region (6). However, the creation of areas for housing in the FDAs is not necessarily the most optimal, as it often only follows market demand.
1. Trust in institutions
After declining during the epidemic, trust in most national institutions increased in 2022, but it decreased again in 2023 and was still below the SDS target. It was at its highest and above the EU average in 2006 but has dropped significantly since then. Trust in most institutions was at its lowest at the end of the global financial crisis, while it improved in 2013–2019 but still remained below the EU average. During the epidemic, which had an impact both on transformation of the economy and on people’s lives, trust in the country’s key institutions decreased again (see IMAD 2021b, 2022d). In the summer of 2022, trust in the parliament and government was the highest since 2008 and trust in political parties also increased, which can be linked to the political changes. In 2023, trust in public institutions fell sharply, influenced by an increase in respondents’ dissatisfaction with how things are developing in Slovenia, while the majority of respondents did not expect the general situation in the country to improve in the next 12 months, and almost half expected the economic situation to deteriorate. Trust in the parliament and political parties was among the lowest in the EU, while trust in the government was the lowest among EU Member States. Trust in local authorities increased, and this is still the institution people trust the most, while political parties are the least trusted institution.
Trust in the EU and most of its institutions has decreased since 2021. It was at its highest in 2006 and lowest in 2015. After increasing in 2015–2021, it decreased again in 2022 and 2023. At the end of 2023, 38% of respondents trusted the EU, which is less than in 2022 and less than the EU average. Trust in European institutions also decreased significantly compared to the previous year and is lower in Slovenia than the EU average. Thirty-seven percent of respondents trusted the European Parliament and 36% the European Commission and the European Central Bank.
2. Executive capacity
The executive capacity indicator, which measures the strategic governance of public institutions, is improving in Slovenia but remains below the EU average. The executive capacity indicator is a component of the indicators of sustainable governance and measures government and institutional performance in eight dimensions: strategic capacity, inter-ministerial cooperation, regulatory impact assessment, societal consultation, policy communication, the implementation of set measures, adaptability and the capacity for reforming the public administration. Since 2017, the indicator value and Slovenia’s rank among the EU Member States have improved, but Slovenia continues to lag behind the EU average in most indicator dimensions. During the COVID-19 epidemic, the index improved, but Slovenia’s ranking dropped by one place (to 19th among EU Member States). Slovenia is still behind the SDS target, but the gap is gradually, albeit slowly, narrowing.
A low executive capacity score points to relatively low government and institutional performance. In the SGI survey (Bertelsmann, 2022), the main weaknesses identified were in effective strategic planning and organisational reforms, where only limited progress has been made in recent years, for example when it comes to the formation of expert consultative groups. During the COVID-19 epidemic, the scores on resilience to the new situation and implementation of measures, especially funding, improved, though they remain far below the EU average. On the other hand, there has been a sharp deterioration in the government communication score, partly due to dissatisfaction with the containment measures taken during the epidemic. Slovenia also lags behind other countries in producing a comprehensive assessment of the impact of proposed regulations (i.e. an RIA) on public finances, the economy, the environment and society as a whole.
3. The Rule of Law Index
Slovenia’s ranking in the Rule of Law Index improved slightly last year, but the country is still in the bottom half of EU Member States. The rule of law highlights the principle of equality before the law and emphasises the inviolability of the authority of the law and rules. This necessitates government adherence to the law, the functioning of government bodies within legal bounds, and the assurance of fundamental human rights and freedoms. By being ranked in the lower half of EU Member States on the Rule of Law Index, in a position which has not improved significantly in the long term (2012–2023), Slovenia lags behind the SDS target. As in previous years, Slovenia scores best in the category of order and safety, where it is close to the top-ranking Scandinavian countries. This is also the area in which the average indicator values have improved the most in the last ten years. Other categories where Slovenia also ranks close to the EU average are fundamental rights (where it scores well on the right to life and safety, the right to work, and respect for the law and the rights of the accused) and civil justice (no discrimination in legal proceedings, affordability of proceedings and the possibility of alternative dispute resolution). Weaknesses in adherence to the rule of law, on the other hand, are indicated by the low indicator values in the areas of criminal justice (e.g. effective investigations, government influence on court decisions and timely adjudication), responsibility and powers of government policy (e.g. sanctions for official misconduct, compliance with legislation and respect for the judiciary by the government), and the absence of corruption (e.g. the risk of corruption in the executive branch and in the legislature). According to Eurobarometer (2021), respondents in Slovenia are less well informed about the rule of law in the country than the EU average, and a high proportion of respondents believe that the EU’s fundamental values, such as human rights, the rule of law and democracy, are not sufficiently protected (Slovenia: 62%; EU: 32%).
4. The expected time needed to resolve litigious civil and commercial cases
According to the latest analysis, the expected time needed to resolve litigious civil and commercial cases shortened again after having lengthened in 2020, but it remains far short of the SDS target. In 2008–2019, Slovenia saw a shortening of the expected time needed to resolve litigious civil and commercial cases at the first instance by more than 40%, in large part due to the project to eliminate court backlogs and other structural reforms (e.g. insolvency legislation). In the first year of the epidemic, this time increased significantly again, due to the containment measures. According to the most recent measurement (2021), it decreased but remains significantly higher than in the years before the epidemic. The gap to the EU average has widened slightly since the epidemic. The expected time needed to resolve a case at the second and third instances remains among the shortest in the EU.
The average time needed to resolve a case shortened, though the time needed to resolve major cases has lengthened slightly. However, due to the different data and methodology used in the calculation, the expected disposition time differs from the actual time taken to resolve a case. The average time needed to resolve a case has shortened significantly over the past few years, to less than one month in 2023. Up to 2016, the time needed to resolve a major case was also rapidly decreasing, due to a smaller incoming caseload and greater efficiency on the part of the courts. Over the last four years, however, the time needed to resolve a major case has actually increased slightly. This can be attributed, among other things, to new competences given to the courts by legislative amendments. Nevertheless, the courts were able to effectively manage incoming new cases, as in most years the courts have resolved more cases than they received (the only exception was 2020, when the functioning of the courts was limited due to the COVID-19 pandemic).
5. The Corruption Perception Index
The perception of corruption remains high in Slovenia and has further increased since 2021. The Corruption Perception Index (CPI), published by Transparency International (2024), reflects the perceived level of public sector corruption according to businesses, experts and analysts. The independence, adequate funding and transparency of judicial systems are key to effectively punishing corruption-related crimes and ensuring oversight. Slovenia is ranked 42nd in the world and 17th among EU Member States. Since 2012, Slovenia has made no progress, and its rank has even deteriorated slightly since 2020, which was characterised by the COVID-19 epidemic, and the gap with the EU average has widened. At the last two measurements, the perception of corruption index was at its lowest level since measurements began in 2005. At the EU level, as many as 10 countries scored lower in the last measurement than they did in 2005. Slovenia is among the EU Member States (with Cyprus, Hungary, Spain and Malta) with the highest increase in the perception of corruption since 2012, while it does better than most countries that joined the EU after 2003. According to Eurobarometer (2023b, 2023d), 83% of respondents think that corruption is widespread in Slovenia (EU: 70%), but at the same time, a large majority of respondents have no personal experience of corruption (93%; EU: 94%). More than half of respondents also believe that corruption in Slovenia has increased in the last three years and is a consequence of the too close links between business and politics. The high perception of corruption can be attributed to respondents believing that high-profile and major cases of corruption, especially those related to bribery, are not or were not adequately sanctioned, while at the same time respondents point out that those reporting corruption are not sufficiently protected. Respondents trust the police, the Commission for the Prevention of Corruption and the Ombudsman the most when it comes to corruption.
6. The Global Peace Index
According to the Global Peace Index, Slovenia was once again one of the most peaceful countries in the world in 2023, which is in line with the SDS 2030 target. In the last decade, Slovenia has been one of the world’s most peaceful countries. In 2023, it was 8th among 163 countries in the world and 5th among EU Member States, but its ranking dropped slightly compared to 2022. While Slovenia continues to rank among the ten best-performing countries in the areas of militarisation (5th) and societal safety and security (8th), it scored worse in the area of domestic and international conflict (41st), which is mainly due to the still slightly worse assessment of relations with neighbouring countries and the intensity of organised internal conflicts. It has also scored slightly lower over the past decade with regard to the indicators of the numbers of internal security officers and police per 100,000 people. Compared with other countries, Slovenia nevertheless ranks relatively high in these areas, but these scores indicate certain shortcomings, albeit ones that do not significantly affect the assessment of peace in the country. According to the Global Peace Index for 2023, Europe remained the most peaceful region in the world and was home to seven of the ten most peaceful countries in the world (five of which are EU Member States). The Middle East and North Africa (MENA) was the least peaceful region. Iceland remains the most peaceful country in the world and Afghanistan the least. Since 2014, the average level of global peacefulness has declined and the gap between the most and the least peaceful countries has widened. This is influenced by a number of factors, in recent years including the COVID-19 pandemic (political and social unrest) and the wars in Ukraine and the Middle East. In addition to Europe and its neighbourhood, conflicts are also escalating in other regions, the number of conflict-related deaths is rising and political instability is increasing in many countries (IEP, 2023a).
7. Share of population reporting problems with crime, vandalism or violence in the local area
The share of people reporting problems with crime, vandalism or violence in the local area in 2023 was the lowest so far and in line with the SDS target. It was 6.8% and has constantly been below the EU average. The incidence of crime is mostly affected by socio-economic factors and social climate, and crime is also more common in urban environments. The share of households reporting problems with crime in their local environment decreased in most regions in 2023, with the smallest share in the Primorsko-Notranjska region (SURS, 2024b). Jugovzhodna Slovenija continued to stand out on this indicator with the highest share, exceeding the Slovenian average by 70%, although this percentage has been declining since 2019, when it peaked. In 2023, the Slovenian average was exceeded also by the Obalno-Kraška, Osrednjeslovenska and Posavska regions, while the Pomurska region was at the Slovenian average. Compared to 2020, the largest decrease in the share was recorded by the Primorsko-Notranjska and Posavska regions. The Osrednjeslovenska region has the most urbanised areas in Slovenia and thus higher potential for crime. Important factors that contribute to a reduction in crime are a better quality of life for families in the community (the prevention and reduction of poverty and social exclusion), high-quality implementation of educational work in schools, and more comprehensive organisation of social life and surveillance in the local community (Meško and Sotlar, 2012).
Slovenia is a safe country, which has a positive impact on the quality of life. The results of the European Social Survey suggest that the share of respondents who have had personal experience of burglary or physical assault between 2010 and 2020 hovered between 9% and 11% and, according to the 2020 data (10%), was slightly lower than the EU-19 average (11%). In 2023, 8% of respondents reported such experience, which is the lowest percentage to date (CJMMK, 2024). In addition to the personal experience of crime, people’s quality of life is also affected by the feeling of being threatened in the immediate environment, which was consistently lower in Slovenia than the average of the countries participating in the survey. According to data for 2020, 94% (EU-19: 76%) of respondents felt safe when walking alone in their neighbourhood at night, compared with 95% in 2023, which is the highest percentage to date.
8. Expenditure on official development assistance
In 2022, expenditure on official development assistance increased significantly, although it still falls short of international commitments. Official development assistance is defined as aid provided by advanced countries in support of sustainable development in developing countries. Slovenia allocated EUR 159.66 million for development assistance, 63% more than in 2021, thus significantly increasing the share of gross national income (GNI) dedicated for this purpose, but this is significantly below the EU average. In terms of expenditure on official development assistance (0.29% of GNI), Slovenia almost met its international commitments, according to which it should strive to increase the share of GNI for this purpose to 0.33% by 2030.
The increase in and structure of assistance in 2022 was significantly affected by the war in Ukraine. Development assistance is the sum of multilateral assistance (funding provided for the regular development activities of international organisations) and bilateral assistance. In 2020 and 2021, the COVID-19 pandemic had a major impact on the amount of aid. Bilateral humanitarian aid has increased significantly, and assistance focused on specific projects (donation of COVID-19 vaccines) also increased significantly in 2021. In 2022, assistance focused on specific projects decreased due to lower demand for vaccine donations, and funds for raising awareness of the importance of international development cooperation decreased again. However, the value of available bilateral aid more than doubled (to EUR 79.2 million), as the war in Ukraine led to a sharp increase in the costs related to the support of refugees and migrants in Slovenia (by 1,115% to EUR 23.9 million, accounting for 30% of available bilateral aid). A large proportion of bilateral aid was also earmarked for the write-off of debt for some African countries (26%) and for paying tuition fees and scholarships (20%), which have been the main focus of Slovenia’s funding in recent years. Humanitarian aid also increased significantly, with the largest share going to emergency aid. In 2022, Slovenia dedicated the largest share of its bilateral aid (32%) to developing countries (geographically unallocated), in particular for the care of refugees and migrants from Ukraine. This is followed by countries from sub-Saharan Africa (29%) and the Western Balkans (24%), which have received the largest share of the aid in recent years. Expenditure on multilateral assistance, most of which (86%) is dedicated to EU development cooperation programmes, increased for the fifth year in a row. However, the increase in funding for official development assistance in 2022 was driven to a great extent by growth in bilateral development aid, mainly due to higher costs related to the support of refugees and migrants in Slovenia (MZEZ, 2023c).