COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - Slovenia Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Slovenia and delivering a Council opinion on the 2023 Stability Programme of Slovenia
Date: 2023-05-24
Institutions: European Commission, Secretariat-General
Subjects: Slovenia, digital transformation, economic policy, economic recovery, energy policy, fiscal policy, green economy, investment policy, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.5.2023  SWD(2023) 624 final  COMMISSION STAFF WORKING DOCUMENT 2023 Country Report -  Slovenia Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Slovenia and delivering a Council opinion on the 2023 Stability Programme of Slovenia {COM(2023) 624 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

Economy has proved to be resilient 
despite recent crises 

the 

despite 

During  2020-2022,  Slovenia’s  economy 
grew  faster  than  the  EU  average.  The 
2020  decline  was  offset  by  strong  growth  in 
2021-2022.  In  2022,  the  economy  grew  by 
5.4% 
external 
environment.  Growth  was  driven  by  increases 
in  consumer  spending  as  well  as  investment. 
Consumer spending was supported by a fiscal 
stimulus  and  available  household  savings.  In 
line  with  global  and  Europe-wide  trends, 
inflation  reached  9.3%  in  2022,  with  core 
inflation averaging 6.8%. 

difficult 

Economic  growth  is  forecast  to  continue 
over  2023-2024,  but  at  a  significantly 
lower  rate  due  to  a  weaker  external 
environment,  high  uncertainty  and  still-
high inflation. In 2023, growth is expected to 
reach  1.2%,  accelerating  to  2.2%  in  2024. 
Inflation  is  projected  to  remain  elevated  over 
the forecast period. 

The  large  current  account  surplus  from 
the  pre-pandemic  period  has  waned.  The 
trade balance excluding energy deteriorated by 
over  6  percentage  points 
(pps)  of  GDP 
between 2019 and 2022. However, in general, 
Slovenia  remains  a  dynamic  and  diversified 
export-oriented  economy  and  was  able  to 
grow  its  exports  market  share  in  2022  (when 
taking  also 
into  account).  The 
country’s current account is projected to return 
to a small surplus in 2023 and 2024.  

re-export 

The economy proved resilient despite the 
effects  of  Russia’s  war  against  Ukraine. 
Somewhat unexpectedly, Slovenia’s trade with 
Russia  expanded  in  2022,  with  export  growth 
driven  by  the  pharmaceutical  industry  (which 
is  not  subject  to  the  sanctions)  and  imports 

reduced 

growth  driven  by  the  higher  value  of  energy 
products.  Dependence  on  Russian  natural  gas 
has  been 
through  diversifying 
supplies.  Higher  gas  prices  are  still  weighing 
on gas-intensive manufacturing (such as basic 
metals,  chemicals,  paper and  paper  products), 
which account for 4.5% of employment, more 
in  Europe (1). 
than  almost  anywhere  else 
Government 
shielded 
households and firms from high energy prices 
(see Annex 8). 

support  measures 

The  banking  sector  continues  to  provide 
funding to the economy. Bank profitability is 
good,  as  return  on  equity  has  systematically 
exceeded  9%  since  2017  (Annex  18).  The 
capital adequacy ratio deteriorated in 2022 to 
a level slightly below the EU average. The non-
performing-loan  ratio  kept  improving  and  fell 
to 1.9% in September 2022,  very close to the 
EU  average  of  1.8%.  In  2022,  the  European 
Systemic Risk Board identified elevated house 
price  growth  and increasing mortgage  lending 
as 
that  Slovenia’s 
macroprudential  policy mix  is  appropriate  and 
sufficient (2).  Recent 
shows 
moderation in the growth of house prices and 
mortgage loans. 

risks  but  observed 

data 

also 

Capital  markets  remain  less  developed 
and  less  liquid  than  the  EU  average. 
Slovenian  companies  rely  more  on  bank 
funding  and  less  on  capital  market  funding 
than  the  EU  average.  The  Ljubljana  Stock 
Exchange  continues  to  face  very  low  and 
decreasing 
stock  market 
capitalisation is among the lowest in the EU. A 
factor behind low capital market investment is 
the  limited  role  of  institutional  investors, 
The 
particularly 
insurance  market  is  highly  concentrated  and 
largest 
largely  state-owned,  as 

liquidity,  and 

companies. 

insurance 

two 

the 

(1)  OECD Economic Outlook November 2022. 

(2)  Vulnerabilities in the residential real estate sectors of 

the EEA countries, ESRB February 2022. 

2 

 
 
                                                 
insurers,  Triglav  and  Sava,  are  controlled  by 
the Slovenian state. In 2021, these companies’ 
equity  investments  were  below  the  levels  of 
comparable  private  insurance  companies  in 
most other OECD countries (3). 

The various measures to mitigate 
energy costs and inflation impact 
public finances 

A withdrawal of the temporary measures 
dealing with the COVID-19 pandemic and 
the energy crisis, and a gradual pickup of 
growth are expected to bring the general 
government deficit below 3%. The general 
government  deficit  fell  to  3.0%  of  GDP  in 
2022  from  4.6%  in  2021  thanks  to  faster 
phasing-out  of  COVID-19 pandemic measures 
and  more  limited  phasing-in  of  measures 
providing  temporary  support  to  lessen  the 
impact  of  inflation  and  of  the  energy  crisis. 
Measures  to  address  high  energy  costs  and 
inflation  are  forecast  to  remain  elevated  in 
2023  when  the  general  government  deficit  is 
forecast to reach 3.7% of GDP. The public debt 
is  forecast  to  fall  from  79.6%  in  2020  to 
66.6% of GDP in 2024 (see Box below).  

Buoyant  revenues  post  COVID-19  were 
largely  offset  by  increasing  expenditure. 
Strong  private  consumption  and  corporate 
profitability  boosted  tax  revenues  which  was 
partially  offset  by  increases  in  social  benefits 
due  to  inflation  and  in  public  wages.  Public 
investment is expected to peak in 2023 at the 
end  of  the  absorption  period  of  the  2014-
2020  multiannual  financial  framework.  The 
December 2022 amendments of the Personal 
Income Tax Act reversed most of the recently-
announced tax cuts. 

In  addition  to  the  support  from  the 
Recovery  and  Resilience  Facility  (see 
Section  2),  Slovenia  benefits  from  a 
significant  volume  of  EU  cohesion  funds 
(EUR 3.1 
representing 
approximately  5.3%  GDP).  This  also 
addresses  the  gap  between  the  development 

billion, 

(3)  OECD 2022 Slovenia country report. 

of  the  capital  region  and other  regions,  which 
is  very  pronounced.  In  2021,  the  GDP  per 
capita  in  purchasing  power  standard.  in  the 
Ljubljana  region  was  almost  three  times 
higher  than  in  the  Zasavska  region.  The 
European Regional Development Fund and the 
Cohesion  Fund  will  boost  digitalisation  and 
research  and  innovation  (R&I),  including  by 
supporting  key  research  infrastructures  (see 
Annex  4).  The  funds  will  also  promote  energy 
efficiency  and  renewable  energy  sources,  as 
well  as  sustainable  mobility.  The  European 
Social Fund plus will invest into adult learning, 
upskilling  and  reskilling  for  the  labour  market 
needs, including in digital and green skills and 
social  inclusion  measures.  The  Just  Transition 
Fund will help implement the national coal exit 
strategy 
(end  date  2033)  by  promoting 
sustainable energy, as well as the training and 
reskilling of workers. 

Labour supply is becoming a major 
bottleneck 

The Slovenian labour market continued to 
improve  in  2022  with  rising  employment 
and historically low unemployment rates. 
The  employment  rate  stood  at  78.2%  in  Q4-
2022,  well  above  the  EU  average  of  74.9%. 
The  unemployment  rate  is  well  below  the  EU 
average,  but  the  activity  rates  (the  share  of 
the  population  offering  their  services  on  the 
labour market) of both younger (15 – 24 year 
olds) and older (60 – 64 year olds) workers in 
Slovenia were below the EU average. Supply of 
labour is becoming more and more challenging 
in  certain  sectors,  although  currently  Slovenia 
is  still  able  to  attract  labour  from  Western 
Balkans  area.  The  unfavourable  demographic 
outlook  is  further  aggravating  the  situation. 
While an increase is expected in the number of 
older  people  and  young  people  working  or 
looking  for  a  job  as  well  as  in  the  number  of 
foreign workers, supply of labour will not keep 
up with demand.  

In  2022,  real  wages  decreased  due  to 
high  inflation.  After  rising  by  4.3%  in  2021, 
real  wages  fell  by  6.6%  in  2022,  despite  a 

3 

 
                                                 
4.3%  increase  in  nominal  terms. (4)  Since 
January  2023,  the  minimum  gross  wage  in 
Slovenia  has  been  EUR  1 203,  12%  higher 
than  in  January  2022.  The  minimum  wage 
amounts  to  more  than  50%  of  the  average 
monthly  wage,  one  of  the  highest  minimum 
wage/average  wage  ratios  in  the  EU.  This  is 
reflected in small differences in wages among 
employees  and  a  big  concentration  of 
employees  that  earn  an  income  close  to  the 
minimum  wage.  The  shortage  of  workers,  in 
combination with high inflation, is expected to 
drive quite strong wage increases in 2023. 

Older  workers,  low-skilled  workers  and 
young people are still in an unfavourable 
labour  market  situation  compared  to  the 
rest  of  the  population.  The  proportion  of 
young  people  in  precarious  forms  of  work  in 
Slovenia remains among the highest in the EU 
and  higher  than  for  other  age  groups.  While 
training 
in  energy-intensive  sectors  has 
increased  to  ensure  a  fair  green  transition  in 
key sectors (Annex 8), there is clearly scope for 
strengthening  policies  to  help  people  find  or 
stay  in  work  and  for  further  tapping  into  the 
labour  market  and  skills  potential  of  certain 
groups.  This  would  allow  Slovenia  to  make 
further  steps  towards  reaching  the  2030 
national targets on employment, adult learning 
and poverty reduction.  

One of the lowest levels income 
inequality in the EU 

Slovenia  is  among  the  Member  States 
with  the  lowest  income  inequality  (see 
Annex 18) and lowest shares of people at 
risk  of  poverty  or  social  exclusion  in  the 
EU. All categories of the social scoreboard for 
Slovenia are at or above the EU average. For 5 
of  16  criteria  of  the  European  Pillar  of  Social 
Rights, Slovenia is one of the best performers 
(see  Annex  14).  The  situation  is  assessed  as 
critical  only  for  the  category  ‘self-reported 
unmet  needs  for  medical  care’,  which  the 

(4)  Compensation of employees per head – real 

compensation calculated by deflating with private 
consumption deflator 

authorities  plan  to  tackle  with  the  announced 
health  reform.  Old-age  poverty  remains  a 
challenge,  particularly 
for  older  women, 
pointing  to  an 
inadequacy  of  the  social 
protection  system.  While  only  13.2%  of  the 
population  were  at  risk  of  poverty  or  social 
exclusion  in  2021  (EU  average:  21.7%),  the 
share of women aged 75+ at risk of poverty or 
social  exclusion  was  almost  twice  as  high 
(25.3% in Slovenia; EU average: 23.8%).  

For 60% of the Sustainable Development 
Goals  (SDGs)  Slovenia  stands  above  the 
EU  average  and  is  progressing  towards 
reaching  the  SDGs  in  88%  of  all  cases. 
Slovenia’s position is the highest within the EU 
for  SDG  10  (Reduced  equalities)  and  SDG  1 
(No poverty). On the other hand,  the gap  with 
the EU average is widest for SDG 13 (Climate 
action)  and  SDG  2  (Zero  hunger),  although 
Slovenia is progressing towards these SDGs.  

Boosting sustainable 
competitiveness is key 

With  a 
relatively  strong  economic 
performance  and  a  steady  outlook, 
Slovenia can focus on boosting long-term 
growth  and  catching  up  with  the  EU. 
Productivity,  measured  as  GDP  per  person 
employed 
(in  pps),  has  been  fluctuating 
between  approximately  80-85%  of  the  EU 
average  over  the  last  20  years.  In  2022,  it 
reached  86%  of  the  EU  average,  improving 
markedly  over  2021,  therefore  demonstrating 
again  the  resilience  of  the  economy  and  the 
success  of  the  measures  to  cope  with  the 
COVID-19  crisis.  However,  it  remains  broadly 
the  same  as  in  2008,  before  the  financial 
crisis.  On  competitiveness,  Slovenia  has  been 
able  to  increase  its  export  market  share.  Unit 
labour  cost  developments  have  been  broadly 
in  line  with  those  of  its  main  peers.  With  its 
population  ageing  rapidly,  labour  constraints 
have  become  more  binding,  with  an  impact 
also  on  long-term  growth.  Importantly,  these 
trends affect long-term financial sustainability 
In 
which  remains  the  primary  challenge. 
addition  to  addressing  public  finance  issues 
such  as  pensions,  healthcare  and  long-term 

4 

 
                                                 
Box x: 

Energy policy response in Slovenia 

Slovenia has adopted several support measures to help households and firms cushion 
the impact of energy-price inflation.  The Commission’s 2023 Spring Forecast projects 
the  country’s  gross  budgetary  costs  to  amount  to  0.9%  of  GDP  in  2023 (6).  Many 
measures preserve the price signal although they are not targeted enough to the most 
vulnerable  households  and  companies.  All  energy  support  measures  are  expected  to 
expire by the end of 2023.  

Fiscal  costs  of  several  measures  depend  on  market  energy  prices.  The  government 
temporarily  regulated  prices  for  electricity,  gas  and  some  other  energy  products  for 
households, SMEs and a few other groups of consumers. Electricity and gas distributors 
selling to consumers at regulated prices are eligible to receive compensation, budgeted 
at  0.2%  of  GDP  in  2023.  Business  consumers  who  are  not  benefiting  from  regulated 
prices  are  eligible  for  subsidies  linked  to  differentials  in  energy  prices  between  2021 
and  2023.  The  total  fiscal  costs  are  budgeted  at  0.3%  of  GDP.  Furthermore,  the 
government  has  reduced  indirect  taxes  until  May  2023  (VAT,  excise  duties  and  CO2 
emission  tax)  on  energy  products  costing  0.3%  of  GDP.  According  to  the  Slovenian 
Statistical  Office,  changes  in  excise  duties  and  taxes  lowered  annual  inflation  by  1.3 
percentage  points (7).  Following  two  rounds  of  energy  vouchers  in  2022,  eligible 
households  benefited  from  a  temporarily  doubled  children’s  allowance  in  2022 
(November and December) and 2023 (January) and an advanced increase in pensions in 
late  2022.  Social  benefits  were  indexed  to  inflation  in  the  previous  year  (10.3%)  in 
March 2023.  

Slovenia  applies  the  EU  solidarity  contribution  adopting  the  Council  Regulation  (EU) 
2022/1854 (8)  at  an  80%  rate,  which  is  higher  than  the  one  established  in  the 
Regulation. 

Slovenia  implemented  different  measures  aiming  to  boost  its  energy  security.  This 
included  issuing  recommendations  and  rolling  out  energy  efficiency  improvements, 
particularly  in  the  public  building  sector (9).  To  ensure  an  uninterrupted  supply  of 
electricity  and  gas,  energy  companies  were  ensured  access  to  the  short-term  liquidity 
working  capital  needed  to  cover  potential  liquidity  stresses (10).  Furthermore,  efforts 
were made towards incentivising traders, suppliers, aggregators and large consumers to 
try to reduce electricity consumption (11).  

care,  competitiveness  and  productivity  are 
in 
major  drivers  determining  the  success 
coping with the challenge.  

The  investment  ratio  has  increased  to 
around  20%  of  GDP  but  remains  below 
the  EU  average.  Investment  as  a  share  of 
GDP  fell  in  2020,  followed  by  a  rebound  in 
2021 thanks to investments in machinery and 
equipment.  The  gap  with  the  EU  average  is 
explained  by  lower  private  sector  investment, 
as  government  investments  are  higher  than 
the  EU  average.  At  the  same  time  the 
economy remains energy- and greenhouse gas 
emission-intensive  and  the  pace  at  which 
is  slow.  While 
reduced 
emissions  are 

investments in the manufacturing sector have 
recovered to pre-financial crisis levels, those in 
retail trade, transport and real estate have not 
fully  recovered  to  historical  highs.  Investment 
decisions  by  firms  are  primarily  demand-
driven,  whereby  growth  in  sales  plays  a  vital 
role in these investment decisions (5). Given its 
high 
sites, 
of  Natura 
environmental  preservation  and  biodiversity 
are assets for Slovenia but challenges remain. 

share 

2000 

(5)  Study: Explaining the Low Level of Investment in 

Slovenia, ECFIN 2022. 

5 

 
                                                 
 
(6)  For 2022, gross budgetary costs of measures amounted 
to 1.0% of GDP. Some of the measures outlined in this 
box were already in place in 2022. 

(7)  Statistical Office of Slovenia 2023, Changes in excise 
duties and taxes lowered annual inflation by 1.3 
percentage points. 

(8)  EUR-Lex - 32022R1854 - EN - EUR-Lex (europa.eu) 

(9)  https://www.energetika-

portal.si/podrocja/energetika/varcevanje-energije-v-
stavbah-javnega-sektorja/ 

(10)  https://www.energetika-portal.si/nc/novica/n/vlada-

dolocila-predlog-porostvenega-zakona-za-obveznosti-
druzb-gen-energija-hse-in-geoplin/ 

(11)  https://www.energetika-portal.si/nc/novica/n/drzavni-
zbor-potrdil-zakon-o-nujnem-posredovanju-za-
obravnavo-visokih-cen-energije/ 

6 

 
                                                                        
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

Implementation of the RRP 

Slovenia’s  recovery  and  resilience  plan 
(RRP) aims to address the key challenges 
related to the twin transition, healthcare, 
long-term  care  and  the  labour  market.  It 
consists  of  33  reforms  and  50  investments 
in 
that  are  supported  by  EUR 1.49 billion 
grants 
loans, 
representing 3.7% of GDP (see Annex 3).  

EUR 705 million 

and 

in 

request  for  the  payment  of  grants.  The 
fulfilled  milestones  address  a  broad  array  of 
policies.  As  a  precondition  for  successfully 
implementing 
reform  was 
the  RRP,  a 
introduced  by  Slovenia  putting  in  place  and 
institutional 
formalising 
framework  for  the  control  and  audit  systems 
to  work  effectively.  Digital  transformation, 
health,  economic  and  institutional  resilience, 
as  well  as  smart,  sustainable  and  inclusive 
growth  are  pillars  that  featured  prominently 
under the first payment request.   

legal  and 

the 

Slovenian  authorities  are  preparing  a 
request  to  modify  the  RRP.  This  involves 
adding  a  REPowerEU  chapter.  It  also  revises 
some  existing  measures  in  light  of  changing 
circumstances (including in particular reduction 
of  the  grants  budget  available  to  Slovenia  by 
EUR  286  million).  The  authorities  plan  to 
submit the change in spring 2023. 

is  ongoing.  Some  of  them, 

Slovenia  plans  to  submit  the  second 
payment  request  in  autumn  2023.  The 
implementation of the relevant milestones and 
targets 
like 
amendments  to  the  Housing  Act,  an  act 
establishing  the  Public  Passenger  Transport 
Management  Company,  and  amendments  to 
the  Construction  Act  and  the  Spatial  Planning 
Act, are already being finalised or are close to 
finalisation. Box 1 contains a summary of key 
deliverables in 2023 and 2024. 

Implementation  should  be  stepped  up  to 
complete  the  remaining  milestones  and 
targets  before  August  2026  and  ensure 
RRF  funds  are  fully  absorbed.  In  recent 
months,  the  coordination  of  reforms  and 
investments  has  picked  up  pace  with  the 
government  actively  involved  in  the  process.  
Nonetheless, 
important 
milestones related to key reforms in the areas 
of  long-term  care,  health  and  pensions,  bold 
decisions will need to be taken, preferably on a 

to  achieve 

the 

of 

implementation 

The 
Slovenia’s 
recovery and resilience plan is underway, 
however  with  increasing  risk  of  delays. 
Slovenia  submitted  1  payment 
request, 
corresponding 
twelve  milestones  and 
to 
targets in the plan  and  resulting  in  an  overall 
disbursement  of  EUR  49.6m.  To  advance 
faster  with  the  implementation  of  its  RRP  in 
the  current  challenging  environment,  it  is 
necessary to strengthen Slovenia’s governance 
structure  and  administrative  capacity,  as  well 
as  to  ensure  that  the  necessary  decisions  are 
taken  without  delays.  This  concerns 
in 
particular the structural reforms of healthcare, 
long-term  care,  pensions  and  taxation.  The 
addendum  of  the  RRP  and  the  additional 
chapter  on  REPowerEU  should  establish  a 
realistic  timeline  for  the  remaining  payment 
requests  and  should  be  submitted  swiftly  to 
avoid  any  further  delay  or  disruption  in  the 
implementation of the plan.  

review  of 
The  following,  more  detailed 
measures being implemented under the RRP in 
no way implies formal Commission approval or 
rejection of any payment requests.  

The first payment from the Recovery and 
Resilience  Facility  (RRF)  has  been  made. 
The  Commission  disbursed  nearly  EUR  50 
million  on  20 April 2023  based  on 
the 
satisfactory  achievement  of  the  first  12 
milestones of the RRP, which formed the first 

7 

 
 
cross-party  basis  and  after  consulting  all 
social partners. 

These  reforms  help  address  the  CSRs  on 
access to finance and business environment.  

its 

Major  steps  were  taken  by  Slovenia  to 
institutional  and  health 
improve 
resilience.  Under  the  first  payment  request, 
the  Debureaucratisation  Act  came  into  force, 
which 
removes  significant  administrative 
barriers for the business sector and the public. 
The  amendments  to  the  Public  Procurement 
Act  simplify  the  procedures  to  enable  bids  to 
be  supplemented  and  clarified  when  selecting 
tenders,  and  abnormally  low  tenders  to  be 
eliminated.  Slovenia  also  aligned  its  public 
procurement  databases  with  those  of  the  EU 
and sent all the data necessary for the public 
procurement  indicators  in  the  Single  Market 
Scoreboard.  The  implementation  of  a  national 
monitoring  model  for  quality  indicators  for 
long-term  care  providers will  help  make  the 
sector  more  transparent.  It  is  an  important 
step  towards  achieving  a  uniform  long-term 
care system in Slovenia. Furthermore, a reform 
was put in place that formalised the legal and 
institutional  framework  for  the  control  and 
audit system of the RRF in Slovenia to enable 
it  to  work  effectively.  These  reforms  help 
address the public administration CSR and the 
CSRs on long-term care.  

to 

and 

advance 

In  2023  and  2024,  work  on  reforms  is 
the 
expected 
implementation of important investments 
will  be  accelerated.  The  act  regulating  the 
pay  system  in  the  public  sector,  amendments 
to the Pension and Disability Insurance Act and 
a ban on using fossil fuels for heating in new 
buildings  are  expected  to  enter  into  force. 
Contracts  for  projects  in  many  areas  are 
expected to be awarded, including investments 
in flood safety, the construction of a clinic for 
infectious  diseases  in  Ljubljana,  a  national 
telemedicine system, the upgrading of railway 
sections  and  stations,  and  long-term  care 
facilities.  

Important measures for the digital 
transition, the business 
environment and long-term care  

for 

digital 

transformation 

Slovenia  took  steps  towards  the  digital 
transition  of  its  economy  and  public 
sector. As part of the first payment request, a 
strategy 
of 
businesses  was  adopted,  which  aims  at 
creating  a  supportive  environment  for  the 
digital  transition  of  businesses  and  industry. 
Since  the  State  Administration  Informatics 
Development Council was established and put 
into  operation,  the  governance  of  the  digital 
transformation  including  IT  standards  and 
other  technological  developments  within  the 
public  administration  has  been  strengthened. 
In  addition,  implementation  of  two  digital 
cross-border  and  multi-country  projects  on 
next generation infrastructure and services as 
well  on  microelectronics  started.  These 
reforms  and  investments all  help  address  the 
digital  Country  Specific  Recommendation 
(CSR). Achieving the milestones and targets for 
completing  the  next  payment  request  entails 
significant  action  to  incentivise  the  digital 
transformation.  

the 

basis 

business 

stimulate 

environment 

The 
reforms 
adopted  as  part  of  the  first  payment 
request  will 
productivity 
growth  in  Slovenia.  The  Act  on  forms  of 
alternative  investment  funds,  in  force  since 
10 August 2022, 
for 
sets 
strengthening  capital  markets  in  Slovenia. 
Amendments to the Investment Promotion Act 
investment 
ensure  that  criteria  on  public 
support  for  businesses  are  focused  on  highly 
productive,  sustainable,  and  digitally  oriented 
business  models  and 
investments.  The 
adoption  of  the  Decree  on  development 
incentives  for  tourism,  part  of  the  first 
request,  will  also  help  further 
payment 
develop 
tourism  sector.  The  decree 
the 
provides  detailed  conditions  and  criteria  for 
the  award  of  incentives in  the tourism  sector. 

8 

 
 
Box x: 

Key deliverables under the RRP in 2023-2024 

 

Set up a revolving fund for the energy renovation of buildings in the public sector  

  Adopt the resolution on the national programme of protection against natural and other 

disasters 

 

 

Establish a comprehensive legal framework for the use of alternative fuels in transport, 
covering the creation, registration and operation of recharging/supply infrastructure  

Prepare  the  reform  of  the  pension  system,  in  close  consultation  with  social  partners, 
aiming to ensure adequacy and long-term sustainability 

  Adopt a law regulating the pay system in the public sector 

  Deploy an additional 100 Gbps backbone optical connections, connecting the data nodes 
of the public institutes in the Academic and Research Network of Slovenia, covering at 
least 75% of all connections 

 

 

Establish an independent body to monitor and control quality in the healthcare system 

Support  the  digital  transformation  programme  by  awarding  contracts  for  projects  for 
the digital transformation of businesses 

9 

 
 
 
FURTHER PRIORITIES AHEAD 

is 

additional 

challenges. 
critical 

Beyond those tackled in the RRP, Slovenia 
Fiscal 
faces 
sustainability 
issue, 
remains  a 
lacklustre investment has held back growth for 
years  and  productivity  growth 
lagging. 
Moreover,  regional  disparities  continued  to  be 
prominent  and  difficulties 
resulting  from 
ageing  and  labour  shortages  have  intensified 
further.  Challenges  also  remain  regarding  the 
diversification  of  energy  supply  and  the 
acceleration 
transition. 
the 
Addressing these challenges will help to speed 
up  convergence  towards  the  EU  average  in 
terms  of  GDP  per  head  and  make  further 
progress 
the  SDGs,  where 
Slovenia  currently  shows  room  for  further 
regarding  SDG  13 
improvement,  namely 
(Climate action) and SDG 2 (Zero hunger). 

in  achieving 

green 

of 

Fiscal sustainability will remain 
under pressure in the medium and 
longer term 

The  sustainability  of  Slovenia’s  public 
finances  faces  substantial  challenges  in 
the  medium  and  long  term.  Public  debt  is 
moderately  high  and  pressure  on  spending 
related to ageing will continue in the medium 
and  long  term  (see  Annex  21).  Under  the 
baseline  scenario (12)  by  2035,  although  the 
old-age  dependency  ratio (the  ratio  of  people 
over  65  to  people  of  working  age,  i.e.  20-64 
years old) will be slightly lower than in the rest 
of  the  EU  (47.3%  against  EU  average  of 
47.6%), spending related to ageing as a share 
of  GDP  is  projected  to  increase  by  the  third 
highest  rate  in  the  EU.  By  2045,  the  old-age 
dependency  ratio  is  expected to  be  above the 
EU average (55.9% against the EU average of 

(12)  The 2021 Ageing Report: Economic and Budgetary 

Projections for the EU Member States (2019-2070), 
European Commission. 

10 

54.6%)  and  the  spending  related  to  ageing  is 
expected to outpace the EU  average spending 
as  a  share  of  GDP.  The  increase  in  costs 
related to ageing is largely driven by spending 
on pensions, followed by healthcare and long-
term care. 

The planned pension reform will be key in 
addressing  the  long-term  sustainability 
of  the  public  finances,  along  with 
improving  the  adequacy  of  pensions.  The 
healthcare  and  long-term  care  systems  also 
weigh  on  long-term  fiscal  sustainability  and 
require  reforms  to  address  financing  but  also 
access and quality of care.  

taxes 

social 

term. 

actual 

49.5%). 

Recurrent 

A  growth-friendly  and  green  tax  reform 
can  support  fiscal  consolidation  in  the 
(including 
longer 
Total 
compulsory 
contributions) 
declined  in  2022  to  36.4%  of  GDP  largely 
owing  to  the  temporary  cuts  in  personal 
income  tax,  before  they  were  reversed,  and 
are  slightly  below  the  EU  average.  The  share 
of labour taxes in Slovenia’s total tax revenue 
is  among  the  highest  in  the  EU  (53.4%;  EU 
average: 
on 
immovable  property  at  0.5%  of  GDP  are 
clearly below the EU aggregated value of 1.1% 
of  GDP  in  2021  (see  Annex  19).  Although 
Slovenia  has  a  high  share  of  environmental 
tax  revenues  as  share  of  GDP  (2.8%  EU 
average  2.2%),  there  can  be  further  related 
measures  to  promote  the  green  transition.  A 
growth-friendly  and  green  tax  reform  could 
enable a shift away  from labour taxation and 
further 
and 
sustainable  growth  through  a  higher  share  of 
recurrent  property  taxes.  Lower  labour  taxes 
jobs,  also  for  foreign 
would  help  create 
workers, in industries for the Net-Zero Age.  

stimulate 

supply 

labour 

taxes 

The  announced  public  wage  reform  has 
fiscal 
major 
sustainability. The growth of average wages 
across  individual  public  sector  salary  sub-

implications 

for 

 
 
                                                 
groups  has  been  uneven,  leading  to  the 
uniform  wage  system  gradually  fragmenting. 
The changes currently being discussed, such as 
an increased use of variable remuneration and 
of  remuneration  based  on  work  performance, 
could  help  address  the  public  sector’s  labour 
shortages 
(e.g.  general  practitioners  or 
qualified  teachers).  However,  this  should  be 
based  on  a  financially  sustainable  system  to 
avoid  a  further  worsening  of  the  balance  in 
the medium and longer run. 

The healthcare and long-term care 
systems face challenges  

in 

shortages 

the  areas  of 
Staff 
healthcare  and 
long-term  care  have 
intensified.  Shortages  of  health  workers, 
especially  general  practitioners  and,  in  some 
areas,  nursing  staff, 
lead  to  ever-longer 
waiting  times  for  certain  medical  treatments 
and  severe  problems  for people  trying  to  find 
a  general  practitioner  in  some  regions  (see 
Annex  16).  In  addition,  these  bottlenecks  and 
other  factors  like  the  disruptions  in  global 
supply chains in recent years have resulted in 
significant  cost  increases  in  these  sectors. 
Improvements in higher education and training 
in healthcare, especially when combined with a 
revision  of  the  requirements  of  job  profiles, 
could help address the labour shortage in the 
medium term. 

The  fiscal  sustainability  of  healthcare 
and  long-term  care  is  not  ensured  yet. 
The  ageing  of  the  population,  which  will 
intensify  in  the  coming  years,  is  expected  to 
exert  huge  financial  pressure.  Public  spending 
on health as a percentage of GDP in Slovenia 
was  the  seventh  highest  among  EU  Member 
States and is projected to increase by 1.5 pps 
of  GDP  by  2070  (EU  average:  0.9  pps).  The 
projected  increase  in  spending  over  2019-
2070 in Slovenia is among the five highest in 
the  EU.  The  share  of  overall  private  health 
spending  in  total  health  spending  is  already 
significant  (see  Annex  16).  The  share  of  out-
of-pocket spending is low, since half of private 
voluntary 
covered 
expenditure 
complementary 
The 
health 
healthcare reforms and investments under the 

insurance. 

by 

is 

RRP  address  these  challenges,  but  there  is 
improvements  in  areas 
scope  for  further 
affecting 
cost 
efficiency.  Without  such  improvements,  it  will 
be almost impossible to create the fiscal space 
needed to improve services and coverage.  

sustainability  and 

fiscal 

insufficiently 

long-term  care 
The  healthcare  and 
integrated. 
systems  are 
There are gaps in the interaction between the 
various  parts  of  the  healthcare  (primary, 
secondary,  and  tertiary  care)  and  long-term 
care  systems,  but  also  between  the  various 
institutional  actors  in  these  systems.  This 
leads  to  significant  inefficiency  across  the 
systems  as  they  fail  to  maximise  synergies 
and avoid duplication of work as well as gaps 
between  the  systems.  Spending  reviews  or 
technical  assistance  would  help  locate  the 
most severe bottlenecks and cost drivers.  

a 

coherent 

Creating 
regulatory 
framework  for  long-term  care  is  a  long-
country-specific 
standing 
recommendation  for  Slovenia.  Action  to 
regulate  long-term  care  as  part  of  a  unified 
system  in  Slovenia  has  been  ongoing  for 
almost  20  years.  This  is  due  in  particular  to 
the  complexity  of  the  system,  which  requires 
activities to be coordinated under  the purview 
of several ministries and the unresolved issue 
of  financing  to  be  addressed.  A  new  law  on 
compulsory  long-term  care  insurance  is  still 
pending.  The  delay  in  implementing  the  long-
term care act adopted in 2021 but postponed  
for  2024  and  now  under  revision,  and  the 
uncertainty  over  the  financing  of  the  system 
adversely  impact  the  acceptance  of  the  new 
system.  

challenges 

Slovenia  also 
in 
faces 
ensuring  the  capital  and  technologies 
needed to support these ongoing reforms. 
The  efficient  and  effective  functioning  of  the 
healthcare  system  and  proposed  long-term 
care  system  requires investments in  all  levels 
(primary, secondary, tertiary) and types of care 
offered  (institutional,  community,  daily  care), 
in  infrastructure,  digitalisation,  as  well  as 
human resources. 

11 

 
Labour shortages and population 
ageing remain major challenges   

An improved business environment 
can increase investment and 
improve productivity 

Labour  shortages,  coupled  with  skills 
mismatches,  have become  acute.  In  2022, 
more  than  half  of  employers  reported  staff 
shortages  in  healthcare  and  long-term  care, 
information  and  communications  technology 
(ICT),  construction,  transport,  accommodation 
and  hospitality  services  and  in  education  (see 
also  Annexes  10  and  14).  The  vacancy  rate 
was almost as high as the unemployment rate. 
It  was  particularly  high  in  the  construction 
sector.  The  most  sought-after  profiles  are 
levels  of 
mainly 
education.  Upskilling  and 
reskilling  have 
increased in energy-intensive industries, which 
is key for ensuring a fair green transition (see 
Annex  8).  In  the  mid  to  long  term,  teacher 
shortages,  particularly  prevalent  in  the  STEM 
fields  (science,  technology,  engineering  and 
affect 
mathematics),  may 
Slovenia’s  good  performance  in  education  in 
the future.  

negatively 

requiring 

those 

lower 

Meeting  the  need  for  a  digitally  skilled 
workforce  remains  a  challenge  and 
digital  skills  are  particularly  low  among 
older and low-skilled workers. In 2021, the 
shares of individuals with at least basic digital 
skills  and  above  basic  digital  skills  were  both 
below  the  EU  average  (50%  vs  54%  for  at 
least  basic  skills  and  20%  vs  26%  for  above 
basic  digital  skills).  Moreover,  while  the  share 
of  ICT  specialists  in  employment  scores  just 
above the EU average, it is far behind that of 
the  innovation  leaders  (see  also  Annex  10). 
there  are  only  minor  differences 
While 
between women and men in the level of digital 
skills, the following groups have a low level of 
skills: older people, people with a low level  of 
education  and  a 
income, 
low 
immigrants,  people  who  are  unemployed  and 
people  who  are  inactive.  It  is  important  to 
to 
address 
achieve  the  national  adult  learning  target  by 
2030 (see Annex 14). 

long-standing  challenge 

level  of 

this 

The  investment  ratio  remains  below  the 
EU  average.  At  the  same  time,  the  economy 
energy-  and  greenhouse  gas 
remains 
emissions-intensive  and  the  pace  of  emission 
reduction  is  slow.  While  investments  in  the 
manufacturing  sector  have  recovered  to  pre-
financial  crisis  levels,  those  in  retail  trade, 
transport  and  real  estate  have  not  fully 
recovered to historical highs.  

has 

faster 

improved 

Slovenia 
its 
competitiveness  broadly  in  line  with  the 
EU  average,  but 
economic 
convergence  with  the  EU  would  require 
even  better  productivity  performance. 
Productivity  growth  has  been  steady 
in 
manufacturing  and  market  services,  but  less 
in  the  construction  sector  and  other 
so 
services.  Export-oriented  companies  perform 
markedly  better  as  regards  productivity  (see 
also  Annex  12).  In  the  domestic  market, 
competitive  pressures  appear  weak  as  both 
business  entry  and  exit  rates  remain  below 
those of peer economies.  

Graph 3.1: Growth of productivity by sector 

Source: Eurostat 

Slovenia  is  among  those  Member  States 
where manufacturing plays a particularly 
important  role  in  the  economy.  The  share 
for Slovenian industry in terms of value added 

12 

-2-101234567IndustryServicesIndustryServicesIndustryServicesIndustryServicesSloveniaRomaniaPortugalEuropeanUnionAverage annual % change1999-022017-20 
  
would 

require 

to GDP was higher than the EU average (29% 
in  2022  vs  23%  in  the  EU)  (see  Annex  12). 
Material usage remains high (see Annex 9). In 
addition,  the  high  share  of  energy-intensive 
significant 
industries 
investments  to  achieve  the  much-needed 
green  and  digital  transformations.  Labour 
productivity growth in the industrial  sectors is 
above  the  EU  average.  For  research  and 
innovation  related  to  the  green  transition,  the 
latest  trends  in  Slovenia  are  rather  negative. 
The country is below the EU average in terms 
of  both  the  number  of  patent  families  and 
private 
(R&I) 
investments in Energy Union R&I priorities. 

research  and 

innovation 

Graph 3.2: Growth of labour productivity in 
manufacturing 

Source: Eurostat 

is  a 

Innovation 

‘moderate 

innovation 
Slovenia 
its 
performer’  and  the  gap  between 
performance  and  the  EU  average 
is 
widening.  Based  on  the  2022  edition  of  the 
Scoreboard (13), 
European 
Slovenia’s  innovation  performance  stands  at 
93.5% of the EU average and is improving at a 
lower  rate  than  most  other  Member  States. 
The  main  obstacles  hindering  Slovenia’s 
performance  are  low  levels  of  venture  capital 
and R&D expenditure in the public sector, with 
firm  investment  in  innovation  also  lagging 
behind  (see  Annex  11).  R&D  intensity  is  still 
below  its  2013  level  and  the  EU  average. 
in  Slovenia 
Venture  capital 

investments 

(13)  2022 European Innovation Scoreboard, Country profile: 

Slovenia 
https://ec.europa.eu/assets/rtd/eis/2022/ec_rtd_eis-
country-profile-si.pdf. 

13 

represent 0.003% of GDP, which is the lowest 
value in the EU ((see Annex 11). This affects in 
particular high-risk innovative SMEs and holds 
back 
research 
results. 

the  commercialisation  of 

lack  of 

The 
specialists  and 
ICT 
infrastructure  appears  to  be  hindering 
the  digital  transformation  of  businesses. 
Some  78%  of  Slovenian  businesses  recruiting 
ICT  specialists  reported  difficulties  in  finding 
adequately  skilled  employees,  which  is  the 
highest  share  in  the  EU  (see  Annex  10).  This 
problem risks being exacerbated in the future, 
as  over  half  of  schoolteachers  in  the  STEM 
fields are expected to retire by 2030, and the 
interest  of  students  in  STEM  teacher  training 
programmes is low (see Annex 15).  Moreover, 
the  R&D  intensity  of  the  Slovenian  ICT  sector 
the  EU  average.  On  average, 
is  below 
digital 
have 
firms 
Slovenian 
technologies to a slightly higher degree than in 
other  EU  countries,  except  big  data,  where  it 
scores  considerably  below.  The  challenges  in 
the  area  of  connectivity  –  only  51%  of 
households  have  access  to  fast  internet  in 
rural  areas  and  5G  coverage  remains  below 
the EU average – can be another drawback in 
this regard (see Annex 10). 

adopted 

is  crucial 

The  competitiveness  of  the  clean-energy 
in  the  context  of 
sector 
decarbonisation.  According  to  the 
latest 
available  data,  the  number  of  Energy  Union 
patent  families  in  Slovenia  has  decreased,  as 
have private R&I investments in Energy Union 
R&I  priorities,  with  both  now  being  below  the 
EU  average.  Moreover,  despite  some  positive 
figures  on  sector  specific  employment,  the 
latest  data  (first  quarter  of  2023)  on  the 
labour  shortage 
in  the  manufacturing  of 
electrical  equipment  indicate  that  there  is  a 
shortage  of  around  50%,  well  above  the  EU 
average of around 30%. This figure is a clear 
indicator  of  the  demand  for  workers  in  this 
sector.  

labour  shortages 

In  Slovenia,  in  the  context  of  the  green 
transition, 
in  key 
sectors  have  increased  in  recent  years, 
also  linked  to  a  lack  of  relevant  skills, 
creating bottlenecks in the transition to a 
net-zero economy. In 2022, labour shortages 

8010012014016008Q409Q410Q411Q412Q413Q414Q415Q416Q417Q418Q419Q420Q421Q422Q4SIITHUHREA19 
  
                                                 
including 

in  2015 

transition, 

were  reported  in  Slovenia  for  66  occupations 
that  required  specific  skills  or  knowledge  for 
the  green 
insulation 
workers,  civil  engineering technicians  and  civil 
engineers (14).  The  job  vacancy  rate  increased 
across key sectors, such as construction (from 
3.5% 
in  2021)  and 
to  5.9% 
manufacturing (from 1.2% in 2015 to 2.7% in 
2021),  with  both  sectors  standing  above  the 
EU average of 3.6% and 1.9%, respectively, in 
2021 (15).  In  2022,  labour  shortages  were 
reported as a factor constraining production in 
industry (for 41.4% of firms) and construction 
(for  66.0%  of  firms) (16).  Upskilling  and 
reskilling for the green transition, including for 
people most affected, and promoting inclusive 
labour  markets  are  essential  policy  levers  for 
speeding  up  the  transition  to  a  net-zero 
economy  and  for  ensuring  its  fairness  (see 
Annex 8). 

Despite  actions  taken  to  improve  the 
business environment, challenges remain. 
Slovenia  has  taken  measures  to  improve  the 
ease  of  doing  business  and  reduce  the 
administrative  burden,  but  companies  are  still 
hindered  by  a  high  number  of  obstacles, 
related to, for instance, the efficiency of state 
institutions,  excessive  red  tape,  and  lengthy 
procedures (17).  There are also process-related 
renewable  energy 
barriers 
the  Single  Market 
sources 
Enforcement  Taskforce (18)  (see  Annex  12), 
which  involve  lengthy  permitting  procedures 
and  understaffed  authorities.  While  Slovenia 
has  implemented  measures  to  address  these 

to  deploying 
reviewed  by 

(14)  Data on shortages is based on the EURES Report on 

labour shortages and surpluses 2022, European Labour 
Authority (2023). National authorities report through a 
questionnaire, based on administrative data and other 
sources as submitted by the EURES National 
Coordination Offices (definitions of shortages differ, 
thus data cannot be compared across countries, and 
cover a wide variety of sectors). Skills and knowledge 
requirements are based on the ESCO (European Skills 
Competences and Occupations) taxonomy on skills for 
the green transition (for occupations at ISCO 4-digit 
level of which there are 436 in total). Examples are 
identified based on their ESCO ‘greenness’ score and 
relevant sectors. 

(15)  Eurostat (JVS_A_RATE_R2). 

(16)  European Business and Consumer Survey. 

(17)  IMAD Development Report 2022 

(18)  SMET report 2021-2022. 

issues,  further  streamlining  of  permitting 
procedures is needed. 

Access  to  equity  finance  remains  a 
challenge  for  companies,  particularly 
SMEs, despite moderately improving since 
2020. Slovenia has a very low ratio of venture 
capital  investment  to  GDP (19),  which  affects 
innovation  capacity.  Slovenian 
companies’ 
capital  markets  also  remain  less  developed 
and less liquid than the EU average (see Annex 
12).  Slovenian  corporations  have  to  rely  more 
on bank financing and less on market funding 
than  the  EU  average,  which  might  limit  their 
ability  to  carry  out  more  risky  projects, 
including in digitalisation. Green financing also 
remains underdeveloped (20). 

Late  payments  have  negative  effects  on 
the  resilience  and  growth  prospects  of 
businesses,  particularly  SMEs.  The  gap 
between the agreed and actual payment time, 
both  in  the  private  and  the  public  sector 
widened  compared  to  2021;  from  12  to  13 
days in the private sector, and from 11 to 13 
in  the  public  sector.  Both  are  significantly 
higher  than  before  the  pandemic  (see  Annex 
12).  

Remaining  barriers  in  other  areas  affect 
the  business  environment.  In  the  past, 
Slovenia  reduced  the  number  of  regulated 
professions to some extent, particularly in the 
crafts  sector,  but  regulatory  restrictiveness  is 
higher  than  the  EU  average  for  professions 
such  as  real  estate  agents,  lawyers,  civil 
engineers, architects, and tourist guides (21).  

(19)  Invest Europe 2021 CEE Private Equity statistics, June 

2022. 

(20)  OECD 2022 Country report. 

(21)  Communication on updating the reform 

recommendations for regulation in professional 
services, COM(2021)385. 

14 

 
                                                 
                                                 
 
There is a need to further diversify 
energy supplies and accelerate the 
green transition  

Slovenia’s  energy  mix  is  dominated  by 
fossil  fuels.  In  2021,  oil  had  the  highest 
inland  energy 
share  of  Slovenia’s  gross 
consumption 
(34%),  followed  by  nuclear 
(20%),  renewables  (20%),  coal  (14%),  and 
natural  gas  (12%)  (see  Annex  6).  While 
Slovenia  has  been  almost  fully  reliant  on 
(direct  and 
indirect)  Russian  natural  gas 
imports  in  the  past,  in  2022  it  was  able  to 
secure  alternative  supplies  from  Algeria, 
sufficient  to  cover  a  third  of  country’s  annual 
consumption  (see  Annex  7).  Although  gas  has 
a  lower  weight  in  Slovenia  than  in  other  EU 
Member  States,  the  industry  sector,  being 
particularly  dependent  on 
is  highly 
vulnerable to price shocks and potential supply 
shortages.  Further  actions  to  ensure  security 
of  supply  by  continuing  efforts  to  diversify 
away  from  Russian  fossil  fuels  and  reduce 
reliance on fossil fuels more generally remain 
a  priority.  Furthermore,  the  high  energy  and 
carbon  intensity  of  the  industry  sector  needs 
to  be  addressed  by  means  of  rolling  out 
energy  efficiency  policy  and 
investment 
measures.  Finally,  while  energy  prices  have 
decreased, uncertainty remains regarding next 
winter,  which  requires  continued  efforts  to 
structurally reduce gas demand. 

it, 

in 

grid 

lags  behind 

investments 
energy 

renewables,  upgrading 

terms  of 
Slovenia 
deploying 
its 
distribution  grid  and  improving  energy 
efficiency. Further streamlining of permitting 
in  the 
procedures  and  more 
distribution 
storage 
and 
infrastructure  are  needed  for  the  uptake  of 
renewables,  particularly  solar  and  wind. 
Slovenia  has  reached  its  2021  renewable 
energy  sources  target  by  using  the  EU 
mechanism of cross-border cooperation in line 
(statistical 
with  Directive  2018/2001/EU 
transfers).  The  update  of  Slovenia’s  national 
energy and climate plan (NECP) is expected to 
include  an  upward  revision  of  the  renewable 
energy  target  by  2030,  requiring  the  country 
to  significantly  increase  efforts  in  deploying 
installations.  Slovenia’s 
renewable  energy 

to  produce  electricity 

proposal  for  an  act  on  deployment  of 
installations 
from 
renewable  energy  sources,  part  of  a  reform 
under  the  RRP,  is  key  for  unlocking  the 
previously 
renewables 
potential 
unexplored areas.  

of 

in 

local 

enable 

reform 

subsequent 

identification 

the  needs  of 
Improving 

The 
and 
selection of priority areas for renewables 
would 
to  be 
the 
implemented.  The  existing  energy  storage  in 
Slovenia is underdeveloped and insufficient to 
renewables 
address 
production. 
the  grid  capacity 
availability at low- and medium-voltage levels, 
including digitalisation  of  the  grid,  would  help 
energy 
renewable 
integrate 
infrastructure,  and 
installations,  charging 
energy 
regard, 
In 
communities.  
simplifying  the  administrative  procedures  for 
energy  communities  is  important  for  their 
successful uptake. Advancing energy efficiency 
measures,  particularly  in  the  building  sector, 
remains  a  priority.  The  success  of  these 
measures  relies  on  the  necessary  support 
elements being present, such as technical and 
administrative assistance. 

additional 

this 

Greening  the  transport  sector  remains  a 
challenge  in  Slovenia.  Transport  emissions 
in  Slovenia  represent  over  two  fifths  of  the 
total  CO2  emissions.  The  high 
country’s 
dependence  on  private  cars  and  still  lagging 
take-up  of  sustainable  modes  of  transport 
also  have  a  negative  impact  on  air  quality. 
Therefore,  further  efforts  are  needed  to 
encourage the modal shift from private cars to 
public  transport  by  improving  the  quality  and 
availability of public transport.  

Climate  change 
is  putting  additional 
pressure on Slovenia’s biodiversity. Due to 
impacts  of  climate  change, 
the  negative 
including 
from  urban  development  and 
changes  in  water  regime  and  agriculture,  the 
conservation  status  of  habitats  and  species 
has been worsening. The increasing frequency 
and intensity of extreme weather events (such 
as floods, draughts, and forest fires)  has also 
negatively  affected  biodiversity,  among  other 
sectors  (see  Annex  6).  The  administrative 
issues  remains 
capacity 
the  climate  adaptation 
insufficient  and 

to  tackle  these 

15 

 
strategy  is  somewhat  outdated.  Furthermore, 
there  are  challenges 
linked  to  promoting 
nature-based  solutions  for  flood-protection 
investments. 

16 

 
KEY FINDINGS 

Slovenia’s  RRP  intends  to  address  a 
its  structural  challenges 
series  of 
through the following measures.  

  Supporting 

the  digitalisation  of 

the 
economy  and  the  public  sector:  Slovenia 
the  digital 
adopted  a 
transformation 
and 
established 
the  State  Administration 
Informatics Development Council. 

for 
businesses 

strategy 
of 

  improving 

the 

country’s 

digital 
infrastructure,  particularly  in  rural  areas 
and promoting the digital transformation in 
all sectors, including via the acceleration of 
investments; 

  taking  measures 

skills 
shortages,  in  particular  green  and  digital 
skills,  including  boosting  the  productivity 
and digital transformation of businesses;  

address 

to 

  Improving  the  business  environment  to 
stimulate  productivity  growth:  Slovenia 
adopted  the  Act  on  forms  of  alternative 
investment 
the 
Investment Promotion Act. 

funds  and  amended 

  better  integration  of  long-term  care  and 
healthcare, 
comprehensive 
and 
investments,  which  will  enable  long-term 
care  and  healthcare  reforms  to  be  fully 
implemented; 

  Removing  administrative  barriers  and 
bottlenecks for the business sector and the 
public: 
the 
Debureaucratisation  Act  and  amendments 
to the Public Procurement Act. 

introduced 

Slovenia 

  ensuring  cost  efficiency  and  financial 
sustainability  of  the  long-term  care  and 
health  systems;  spending  reviews  would 
help  locate  the  most  severe  bottlenecks 
and cost drivers; 

  continuing 

to 

the  business 
improve 
environment  by  removing  red  tape  and 
carrying out reforms to boost labour supply, 
therefore  alleviating  bottlenecks,  and 
productivity;      

  increasing 

the  green 
investment  on 
transition  and  on  diversifying  energy 
supply, in particular by stepping up the use 
of  renewable  energy  sources,  particularly 
permitting 
with 
procedures, 
electricity 
distribution  networks, 
improving  energy 
efficiency,  as  well  as  speeding  up  the 
modal shift to public transport. 

streamlining 
strengthening 

further 

  Reforming  the  national  healthcare,  long-
term  care  and  pension  systems:  Slovenia 
adopted the  national  monitoring model  for 
quality 
long-term  care 
for 
providers.  

indicators 

an 

should 

ensure 

Slovenia 
effective 
governance  structure  and  strengthen  the 
administrative  capacity  to  allow  for  a  swift 
and steady implementation of its recovery and 
resilience plan. Swiftly finalise the REPowerEU 
chapter  with  a  view  to  rapidly  starting  its 
implementation. 

Beyond  the  reforms  and  investments  in 
the RRP, Slovenia would benefit from the 
following measures: 

  pursuing  policies  that  support  long-term 
fiscal  sustainability  and  shifting  the  tax 
burden  from  labour  towards  more  growth-
friendly and sustainable sources; 

17 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan - overview 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy security and affordability 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2022 CSRs 
Key elements of Slovenia’s RRP 

21 

22 

22 

24 

28 

31 

34 

35 

35 

40 

45 

48 

48 

50 

52 

55 

59 

62 

62 

65 

67 

70 

72 

72 

74 

76 

77 

24 
26 

 
 
 
Industry and Single Market 

A5.1. 
Resilience indices summarising the situation across RDB dimensions and areas 
A6.1. 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
A7.1. 
Key energy indicators 
A8.1. 
Key indicators for a fair transition in Slovenia 
A9.1. 
Overall and systemic indicators on circularity 
A10.1.  Key Digital Decade targets monitored by DESI indicators 
A11.1.  Key innovation indicators 
A12.1. 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for Slovenia 
A14.2.  Situation of Slovenia on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at regional level in Slovenia 
A18.1.  Financial soundness indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - Slovenia 
A21.2.  Heat map of fiscal sustainability risks - Slovenia 

LIST OF GRAPHS 

A1.1. 
Progress towards the SDGs in Slovenia in the last 5 years 
A2.1. 
Slovenia’s progress on the 2019-2022 CSRs (2023 European Semester) 
A3.1. 
Fulfilement status of milestones and targets 
A3.2. 
Total grants disbursed under the RRF 
A3.3. 
Disbursements per pillar 
A4.1. 
Cohesion policy funds 2021-2027 in Slovenia: budget by fund 
A4.2. 
Synergies between Cohesion policy funds and the RRF six pillars in Slovenia 
A4.3. 
Cohesion policy funds contribution to the SDGs in 2014-2020 and 2021-2027 in Slovenia 
A6.1. 
Thematic – greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2021 
A6.2. 
Energy mix (top) and Electricity mix (bottom), 2021 
A6.3. 
Thematic – environmental investment needs and current investment, p.a. 2014-2020 
A7.1. 
Share of gas consumption per sector, 2021 
A7.2. 
Share of gas consumption per industrial sector (% of total industry gas consumption) 
A7.3. 
Slovenia´s retail energy prices for industry (top) and households (bottom) 
A7.4. 
Private R&I investment in Energy Union R&I priorities 
A8.1. 
Fair transition challenges in Slovenia 
A8.2. 
Distributional impacts of energy prices due to rising energy expenditure (2021-2023) in Slovenia 
A9.1. 
Trend in material use 
A9.2. 
Treatment of municipal waste 
A11.1.  R&D intensity as % of GDP 2010-2021 
A11.2.  Venture capital as % of GDP in 2021 
A12.1.  Labour productivity in industry 
A12.2.  Business environment and productivity drivers 
A13.1.  Slovenia. a) Regulatory impact assessment, b) Stakeholder engagement and c) Ex post evaluation of legislation 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2019-2070 
A19.1.  Tax revenues for different tax types as % of total taxation 
A19.2.  Tax wedge for single and second earners as a % of total labour costs, 2022 

30 
31 
36 
41 
45 
47 
48 
51 
54 
56 
57 
58 
60 
62 
64 
66 
68 
69 
71 

22 
23 
26 
27 
27 
28 
28 
29 
31 
32 
33 
37 
37 
38 
39 
41 
42 
44 
44 
48 
48 
50 
52 
55 
60 
60 
67 
67 

22 

 
 
 
 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Slovenia’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  and  the 
environmental crisis, while ensuring that no one is 
left  behind.  The  EU  and  its  Member  States  are 
committed  to  this  historic  global  framework 
agreement  and  to  playing  an  active  role  in 
maximising  progress  on  the  SDGs.  The  graph 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

related 

Slovenia  is  improving  on  most  of  the  SDG 
environmental 
indicators 
sustainability (SDGs 2, 6, 7, 9, 11, 12, 13, 15), 
but it needs to catch up with the EU average 
on  others  (SDGs  12,  14).  Slovenia  has  made 

to 

final 

energy 

in  gross 

some  slight  progress  on  increasing  the  share  of 
renewable 
energy 
consumption (SDG 7); it rose from 24.1% to 25.0% 
in  2021.  Furthermore,  Slovenia  has  taken  some 
action  regarding  the  energy  import  dependency, 
reducing it from 49.3% in 2015 to 45.8% in 2020. 
The recovery and resilience plan (RRP) is expected 
to  boost  Slovenia’s  capacity  in  the  area  of 
renewable  energy  by  addressing 
regulatory 
challenges.  In  this  context,  Slovenia  made  some 
progress  regarding  SDG  13  (climate  action)  even 
though  it  needs  to  catch up  with the  EU  average. 
In  particular,  Slovenia  has  increased  the  share  of 
renewable 
energy 
consumption  from  22.0%  in  2015  to  25.0%  in 
2021.  Despite 
industry, 
innovation  and  infrastructure  (SDG  9),  Slovenia 
still  needs  to  catch  up  with  the  EU  average  on 
certain indicators. In particular, the share of buses 
and trains in passenger transport is very low (8.7% 
in  2020,  compared  to  EU  average  of  12.8%).  In 
terms  of  life  below  water  (SDG  14),  the  share  of 
marine protected areas in Slovenia (5% in 2021) is 

improvements 

in  gross 

energy 

final 

on 

Graph A1.1: Progress towards the SDGs in Slovenia in the last 5 years 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country specific-data on the short-term progress of Member States: Key findings - Sustainable development 
indicators - Eurostat (europa.eu). The status of each SDG in a country is the aggregation of all the indicators for the specific goal 
compared to the EU average. A high status does not mean that a country is close to reaching a specific SDG, but signals that it is 
doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of early April 2023, except for the EU Labour Force Survey (LFS) indicators released on 27 April 
2023. Data mainly refer to 2016-2021 or 2017-2022. 

23 

 
 
 
 
 
 
nor  in  education  and  training  is  low  compared  to 
the  EU  average  (7.3%  in  2021;  EU  average: 
13.1%)  and  the  long-term  unemployment  rate  is 
also  below  the  EU  average  (1.9%  in  2021;  EU 
average:  2.8%).  On  SDG  16  (Peace,  justice  and 
strong  institutions),  Slovenia  needs  to  catch  up 
with  the  EU  average.  In  particular,  the  perceived 
independence  of  the  justice  system  in  Slovenia  is 
lower  than  the  EU  average  (in  Slovenia,  49%  of 
population in 2022 rated it as very and fairly good; 
EU  average:  53%.  Furthermore,  Slovenia  needs to 
catch with the EU average regarding real GDP per 
capita (SDG 8) (EUR 21 310 in 2021; EU average: 
EUR 27 880). It also had a lower investment share 
of  GDP  (SDG  8)  than  the  EU  average  (20.3%  of 
GDP;  EU  average  22.4%).  Slovenia 
faces 
challenges  particularly  in  the  sustainability  of 
public finances in the long-term due to its ageing 
population and the pressure on public spending in 
the  areas  of  pensions,  health  care  and  long-term 
care. The Slovenian RRP includes measures related 
to long-term care to tackle the impact on the fiscal 
sustainability.  With  regard  to  ‘partnership  for 
goals’  (SDG  17),  Slovenia  is  progressing  well  and 
lies above the EU average.  

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other Annexes. 

visibly lower than the EU average (12.1% in 2021). 
The  Slovenian  RRP  contains  several  measures 
aimed at increasing the currently low use of public 
transportation  and  significantly 
improving  the 
country’s railway infrastructure, which will help the 
country tackle this challenge. 

Slovenia  performs  well  or  is  improving  on 
some  SDG  indicators  related  to  fairness 
(SDGs 1, 4, 5, 7, 8, 10) but needs to catch up 
with  EU  average  on  access  to  healthcare 
(SDG  3).  Slovenia  performs  well  on  poverty  and 
basic needs (SDG 1) and compared to EU average 
(EU: 21.7% in 2021) has a low share of people at 
risk  of  poverty  or  social  exclusion  with  13.2%  in 
2021.  In  addition,  Slovenia  has  improved  on  the 
fairness-related  indicator gender  equality  (SDG  5) 
but it still needs to catch up with EU average. The 
quality  of  education  (SDG  4)  is  above  the  EU 
average  and  improving.  Despite  good  progress, 
Slovenia is only just above the EU average when it 
comes to affordable and clean energy (SDG 7). On 
access  to  healthcare  (SDG  3),  the  self-reported 
unmet  needs  for  medical  care  are  higher  than  in 
the  EU  (4.8%  of  population  aged  16  or  over,  in 
2021;  EU  average:  2.0%).  The  Slovenian  RRP 
contains  several  measures  aimed  at  addressing 
this challenge effectively, including key reforms in 
long-term care and healthcare. 

Slovenia  performs  well  on  most  SDG 
indicators  related  to  productivity  (SDGs  4,  8 
and 9) but still needs to catch up with the EU 
average  regarding  SDG  9.  Slovenia  has  made 
significant  progress  on  sustainable  infrastructure 
(SDG 9) regarding the share of households with a 
high-speed  internet  connection.  Since  2015,  this 
share  increased  from  50.4%  to  65.5%  in  2020 
and even further to 72.4% in 2021. In the area of 
digital skills (SDG 4), Slovenia is still below the EU 
average regarding the share of adults with at least 
basic  digital  skills  (49.7%  in  2021;  EU  average: 
53.9%).  This  means  that  more  than  half  of  the 
Slovenian  population  aged  16-74  still  lacks  basic 
digital skills. The Slovenian RRP will help digitalise 
the  country’s  public  and  private  sector  and  boost 
digital  skills.  The  measures  under  the  RRP  will 
ensure  that  further  progress  is  made  on  these 
SDGs. 

Slovenia  performs  well  on  SDG  indicators 
related  to  macroeconomic  stability  (SDGs  8, 
16 and 17). Slovenia performs well on indicators 
measuring  employment  (SDG  8).  Notably,  the 
percentage of young people neither in employment 

24 

 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

Graph A2.1: Slovenia’s progress on the 2019-2022 
CSRs (2023 European Semester) 

Source: European Commission. 

The Commission has assessed the 2019-2022 
country-specific  recommendations  (CSRs) (22) 
addressed  to  Slovenia  as  part  of  the 
European  Semester.  These  recommendations 
concern  a  wide  range  of  policy  areas  that  are 
related to  13  of  the  17  Sustainable Development 
Goals  (see  Annexes  1  and  3). The  assessment 
considers  the  policy  action  taken  by  Slovenia  to 
date (23) and the commitments in its recovery and 
resilience  plan  (RRP) (24).  At  this  stage  of  RRP 
implementation,  51%  of  the  CSRs  focusing  on 
structural  issues  from  2019-2022  have  recorded 
at  least  ‘some  progress’,  while  33%  recorded 
‘limited  progress’  (see  Graph  A2.1).  As  the  RRP  is 
implemented  further,  considerable  progress  in 
addressing structural CSRs is expected in the years 
to come. 

(22)  2022 CSRs: EUR-Lex - 32022H0901(24) - EN - EUR-Lex 

(europa.eu) 

      2021 CSRs: EUR-Lex - 32021H0729(25) - EN - EUR-Lex 

(europa.eu) 
2020 CSRs: EUR-Lex - 32020H0826(24) - EN - EUR-Lex 
(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(24) - EN - EUR-Lex 
(europa.eu) 

(23)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (twice a year reporting on progress in implementing 
milestones and targets and resulting from the payment 
requests assessment). 

(24)  Member States were asked to effectively address all or a 

significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here considers the 
degree of implementation of the measures included in the 
RRP and of those carried out outside of the RRP at the time 
of assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which are not yet adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

25 

No Progress2%Limited Progress33%Some Progress51%Substantial Progress9%Full Implementation5% 
 
                                                 
     
 
 
 
 
 
Table A2.1: Summary table on 2019-2022 CSRs 

(Continued on the next page) 

26 

SloveniaAssessment in May 2023*RRP coverage of CSRs until 2026Relevant SDGs2019 CSR 1Limited progressAchieve the medium-term budgetary objective in 2020.Not relevant anymoreNot applicableSDG 8, 16Adopt and implement reforms in healthcareLimited ProgressRelevant RRP measures planned as of 2024SDG 3and long-term care that ensure quality, accessibility and long-term fiscal sustainability.Some ProgressRelevant RRP measures being implemented as of 2021.SDG 3Ensurethelong-termsustainabilityandadequacyofthepensionsystem,includingbyadjustingthestatutoryretirementagerestrictingearly retirement and other forms of early exit from the labour market.Limited ProgressRelevant RRP measures planned as of 2024.SDG 8Increasetheemployabilityoflow-skilledandolderworkersbyimprovinglabourmarketrelevanceofeducationandtraining,lifelonglearningandactivationmeasures,includingthroughbetterdigitalliteracy.Limited ProgressRelevant RRP measures planned as of 2024.SDG 4, 82019 CSR 2Some progressSupport the development of equity markets.Some ProgressRelevant RRP measures being implemented as of 2022.SDG 8, 9Improve the business environment by reducing regulatory restrictions and administrative burden.Some ProgressRelevant RRP being implemented as of 2021.SDG 8, 9Improve competition, professionalisation and independent oversight in public procurement.Some ProgressRelevant RRP measures being implemented as of 2021.SDG 9Carry out privatisations in line with the existing plans.Some Progressnot applicableSDG 92019 CSR 3Some progressFocus investment-related economic policy on research and innovation,Some ProgressRelevant RRP measures planned as of 2021.SDG 9, 10, 11low carbon and energy transition,Limited ProgressRelevant RRP measures planned as of 2022.SDG 7, 9, 10, 11, 13sustainable transport, in particular rail, and Some ProgressRelevant RRP measures planned as of 2022.SDG 10, 11environmental infrastructure, taking into account regional disparities.Some ProgressRelevant RRP measures planned as of 2022.SDG 6, 10, 11, 12, 152020 CSR 1Some progressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment. Not relevant anymoreNot applicableSDG 8, 16Ensuretheresilienceofthehealthandlong-termcaresystem,includingbyprovidingtheadequatesupplyofcriticalmedicalprod-ucts and addressing the shortage of health workers.Some ProgressRelevant RRP measures being implemented as of 2022.SDG 32020 CSR 2Substantial progressMitigate the social and employment impact of the COVID-19 crisis, including by providing adequate income replacement and social protection, Substantial ProgressRelevant RRP measures planned as of 2021.SDG 1, 2, 8, 10enhancing short-time work schemes and through flexible working arrangements. Substantial ProgressRelevant RRP measures planned as of 2022.SDG 8Ensure that these measures provide adequate protection for non-standard workers.Some ProgressRelevant RRP measures planned as of 2022.SDG 1, 2, 8, 102020 CSR 3Some progressContinue to swiftly implement measures to provide liquidity and financing to businesses and households and Full ImplementationRelevant RRP measures planned as of 2022.SDG 8, 9reduce administrative burden. Some ProgressRelevant RRP measures being implemented as of 2021.SDG 8, 9Front-load mature public investment projects and Substantial ProgressRelevant RRP measures planned as of 2023.SDG 8, 16promote private investment to support the economic recovery. Some ProgressRelevant RRP measures being implemented as of 2023SDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularonclean and efficient production and use of energy, Limited ProgressRelevant RRP measures planned as of 2022.SDG 7, 9, 13environmental infrastructure,Some ProgressRelevant RRP measures planned as of 2022.SDG 6, 12, 15sustainable transport,Some ProgressRelevant RRP measures planned as of 2022.SDG 11research and innovation, and Some ProgressRelevant RRP measures planned as of 2021.SDG 9the rollout of the 5G network. Some ProgressRelevant RRP measures planned as of 2022.SDG 9Promote digital capacities of businesses, andSome ProgressRelevant RRP measures being implemented as of 2021.SDG 9 strengthen digital skills, Some ProgressRelevant RRP measures planned as of 2022.SDG 4e-commerce and Limited ProgressRelevant RRP measures planned as of 2021.SDG 9e-health.Limited ProgressRelevant RRP measures planned as of 2023.SDG 3 
 
 
 
  
 
Table (continued) 

Note:  
* See footnote (24).  
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP are necessary to fully implement CSRs and address their underlying challenges. Measures indicated as 'being implemented' 
are only those included in the RRF payment requests submitted and positively assessed by the European Commission.  
Source: European Commission. 

27 

2021 CSR 1Some ProgressIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationally financed investment.Full implementationNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Some ProgressNot applicableSDG 8, 16At the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition. Some ProgressNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacy,andsustainabilityofhealthand social protection systems for all.Limited ProgressNot applicableSDG 8, 162022 CSR 1Limited ProgressIn2023,ensurethatthegrowthofnationally-financedcurrentexpenditureisinlinewithanoverallneutralpolicystance,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjustcurrentspendingtotheevolving situation.No ProgressNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitionandforenergysecurity,includingbymakinguseoftheRRF,RePowerEUand other EU funds.Substantial ProgressNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachieving prudent medium-term fiscal positions.Some ProgressNot applicableSDG 8, 16Ensure the long-term fiscal sustainability of the healthcare andLimited ProgressRelevant RRP measures planned as of 2024SDG 3long-term care systems.Limited ProgressRelevant RRP measures planned as of 2021 SDG 3Introducecompensatingmeasurestofinalisetheshiftfromlabourtaxes,includingbyrebalancingtowardsmoregreenandgrowth-friendly taxes.Limited ProgressSDG 8, 10, 122022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementing Decision of 28 July 2021.Submitthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtofinalisingtheirnegotiationswiththeCommissionandsubsequently starting their implementation.2022 CSR 3Limited progressDiversifyimportsoffossilfuelsandreduceoverallrelianceonfossilfuelsLimited ProgressRelevant RRP measures planned as of 2022.SDG 7, 9, 13byacceleratingthedeploymentofrenewables,inparticularbyfurther streamlining permitting procedures,Limited ProgressRelevant RRP measures planned as of 2022.SDG 7, 8, 9, 13and strengthening of the electricity distribution network.Limited ProgressRelevant RRP measures planned as of 2022.SDG 7, 9, 13Increaseimplementationofenergyefficiencymeasures,notablyinthe building sector,Some ProgressRelevant RRP measures planned as of 2022.SDG 7electrification of the transport sector,Limited ProgressRelevant RRP measures planned as of 2022.SDG 11and by ensuring that energy infrastructure and interconnections have sufficient capacity.Some ProgressSDG 7, 9, 13RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN - OVERVIEW 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the centrepiece of the EU’s efforts to help it 
recover  from  the  COVID-19  pandemic,  speed 
up  the  twin  transition  and  strengthen 
resilience  against  future  shocks.  The  RRF 
also  contributes  to  implementation  of  the 
SDGs  and  helps  to  address  the  Country 
Specific  Recommendations 
(see  Annex 4). 
its  current  recovery  and 
Slovenia  submitted 
resilience  plan 
(RRP)  on  30 April 2021.  The 
Commission’s positive assessment on 1 July 2021 
and Council’s approval on 28 July 2021 paved the 
way  for  disbursing  EUR 1.8 billion  in  grants  and 
EUR 0.7 billion  in  loans  under  the  RRF  over  the 
2021-2026 period.   

into  force  of  the  RRF 
Since  the  entry 
Regulation  and  the  assessment  of  the 
national  recovery  and  resilience  plans, 
geopolitical  and  economic  developments 
have caused major disruptions across the EU. 
In  order  to  effectively  address  these  disruptions, 
the  (adjusted)  RRF  Regulation  allows  Member 
States to amend their recovery and resilience plan 
for  a  variety  of  reasons.  In  line  with  article  11(2) 
of the RRF, the maximum financial contribution for 
Slovenia was moreover updated on 30 June 2022 
to  an  amount  of  EUR 1.5 billion  in  grants.  No 
revision  was  submitted  at  the  time  of  publication 
of this country report yet.  

Table A3.1: Key elements of Slovenia’s RRP 

Slovenia’s  progress  in  implementing  its  plan 
is  published  in  the  Recovery  and  Resilience 
Scoreboard (25).  The  Scoreboard  also  gives  an 
overview  of  the  progress  made  in  implementing 
the RRF as a whole, in a transparent manner. The 
graphs in this Annex show the current state of play 
of  the  milestones  and  targets  to  be  reached  by 
Slovenia 
as 
subsequently 
satisfactorily fulfilled by the Commission. 

assessed 

and 

EUR 281 million has so far been disbursed to 
Slovenia  under  the  RRF.  The  Commission 
disbursed  EUR 231  million  to  Slovenia  in  pre-
financing  on  17  September  2021,  equivalent  to 
13%  of  the  financial  allocation.  Slovenia’s  first 
payment  request  was  positively  assessed  by  the 
Commission, taking into account the opinion of the 
Economic  and  Financial  Committee,  leading  to 
EUR 49.6 million  being  disbursed 
in  financial 
support  (net  of  pre-financing)  on  20 April  2023. 
The  related  12  milestones  cover  reforms  in  the 
areas  of 
transition,  business 
environment, efficient public institutions, and long-
term care. 

the  digital 

Graph A3.1: Fulfilment status of milestones and 
targets 

Note: This graph displays the share of satisfactorily fulfilled 
milestones and targets. A milestone or target is satisfactorily 
fulfilled once a Member State has provided evidence to the 
Commission that it has reached the milestone or target and 
the Commission has assessed it positively in an implementing 
decision. 
Source: Recovery and Resilience Scoreboard 

Source:  Recovery and Resilience Scoreboard 

(25)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

28 

Current RRPScope Initial planCID adoption date28 July 2021Total allocation EUR 1.78 billion in grants and EUR 0.7 billion in loans (4.77% of 2021 GDP)Investments and reforms 59 investments and 34 reforms Total number of milestones and targets209Satisfactorily fulfilledNot fulfilled 
 
 
 
   
 
 
 
 
   
 
                                                 
 
Graph A3.2: Total grants disbursed under the RRF 

Note: This graph displays the amount of grants disbursed so 
far under the RRF. Grants are non-repayable financial 
contributions. The total amount of grants given to each 
Member State is determined by an allocation key and the 
total estimated cost of the respective RRP. 
Source:  Recovery and Resilience Scoreboard 

Graph A3.3: Disbursements per pillar 

Note:  Each disbursement reflects progress in the implementation of the RRF, across the six policy pillars. This graph displays how 
disbursements under the RRF (excluding pre-financing) relate to the pillars. The amounts were calculated by linking the milestones 
and targets covered by a given disbursement to the pillar tagging (primary and secondary) of their respective measures. 
Source:  Recovery and Resilience Scoreboard 

29 

280.65 million0 mn5 mn10 mn15 mn20 mn25 mnGreen transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic, socialand institutionalresiliencePolicies for thenext generation 
 
   
 
 
 
 
 
 
     
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The  EU  budget  of  over  EUR  1.2  trillion  for 
2021-2027  is  geared  towards  implementing 
the  EU’s  main  priorities.  Cohesion  policy 
investment amounts to EUR 392 billion across the 
EU and represents almost a third of the overall EU 
budget, including around EUR 48 billion invested in 
line with REPowerEU objectives.   

Graph A4.1: Cohesion policy funds 2021-2027 in 
Slovenia: budget by fund 

(1) million EUR in current prices, % of total; (total amount 
including EU and national co-financing) 
Source: European Commission, Cohesion Open Data 

In  2021-2027,  in  Slovenia,  cohesion  policy 
funds (26)  will  invest  EUR  2.1  billion  in  the 
green  transition  and  EUR  211  million  in  the 
digital  transformation  as  part  of  the 
country’s  total  allocation  of  EUR  4.5  billion. 
In  particular,  the  European  Regional  Development 
Fund  (ERDF) and  the  Cohesion  Fund  (CF) (27)  will 
including  by 
boost  digitalisation  and  R&I 
supporting  key  research  infrastructures.  SMEs  lie 
at  the  heart  of  ERDF  support  to  businesses  in 
Slovenia,  in  line  with  its  smart  specialisation 
strategy.  The  support  is  expected  to  trigger  EUR 
790  million  in  private  investment.  The  ERDF  and 
the  CF  will  also  promote  energy  efficiency  and 
renewable  energy  sources,  as  well  as  sustainable 
mobility. Around 300 000 square meters of public 
space  will  become  more  energy  efficient  and 
energy  poverty  will  be  addressed  in  hundreds  of 
homes.  170  health-  and  long-term  care  facilities 
and  12 000  businesses  will  receive  support,  to 
improve  long-term  care  and  social  inclusion.  The 
swift transition to a low-carbon economy is key for 
the  innovation  potential  of  Slovenia.  The  Just 

Transition Fund (JTF) will help to ease the national 
coal  exit  strategy  (end  date  2033)  by  promoting 
sustainable  energy,  as  well  as  the  training  and 
reskilling  of  workers,  to  diversify  the 
local 
economy  in  the  two  coal  regions.  Under  the 
(ESF+),  Slovenia 
European  Social  Fund  Plus 
allocates EUR 423 million to increasing the quality 
of  education  and  training  and  aligning  it  with 
labour  market  needs,  and  to  improving  access  to 
jobs,  notably  for  the  long-term  unemployed,  low-
educated and older people. Further actions include 
developing a long-term skills forecasting platform 
including  a 
learning  measures, 
and 
national  campaign  to  increase  awareness  and 
career  guidance 
in  vocational  education  and 
training (VET). 

lifelong 

Of  the  investments  mentioned  above,  EUR 
369  million  will  be  invested  in  line  with 
REPowerEU objectives. This is on top of the EUR 
381  million  dedicated  to  REPowerEU  under  the 
2014-2020 budget. EUR 135 million (2021-2027) 
and EUR 314 million (2014-2020) is for improving 
energy  efficiency;  EUR  163  million  (2021-2027) 
and EUR 67 million (2014-2020) is for renewable 
energy  and  low-carbon  R&I;  and  EUR  71  million 
(2021-2027) is for smart energy systems. 

Graph A4.2: Synergies between Cohesion policy 
funds and the RRF six pillars in Slovenia 

(1) million EUR in current prices (total amount, including EU 
and national co-financing)   
Source: European Commission  

In  2014-2020,  cohesion  policy  funds  made 
EUR  3.3  billion  available  to  Slovenia (28),  with 
an  absorption  of  86% (29). 
Including  national 
financing,  the  total  investment  amounts  to  EUR 
4.1 billion - around 1.4% of GDP for 2014-2020.  

(26)  European Regional Development Fund (ERDF), Cohesion Fund 
(CF), European Social Fund+ (ESF+), Just Transition Fund 
(JTF), excluding Interreg programmes. Total amount includes 
national and EU contributions. Data source: Cohesion Open 
Data.   

(28)  Cohesion policy funds include the ERDF, CF, ESF and the 
Youth Employment Initiative (YEI). ETC programmes are 
excluded here. According to the ‘N+3 rule’, the funds 
committed for 2014-2020 must be spent by 2023. REACT-
EU is included in all figures. The total amount includes EU 
and national co-financing. Data source: Cohesion Open Data. 

(27)  ERDF and CF expected achievements from the 2021-2027 

(29)  2014-2020 Cohesion policy EU payments by MS is updated 

programmes. 

daily on Cohesion Open Data.   

30 

845 19%2,390 53%976 21%304 7%CFERDFESF+JTF1.5361081.137566612.1462119581.01111031205001000150020002500Green transitionDigitaltransformationSmart, sustainableand inclusivegrowthSocial and territorialcohesionHealth, economic,social andinstitutionalresiliencePolicies for the nextgenerationEU CP 2014-2020 (million EUR)EU CP 2021-2027 (million EUR) 
 
   
                                                 
  
                                                 
 
flexibility 

Slovenia  continues  to  benefit  from  cohesion 
support  economic 
to 
policy 
recovery,  step  up  convergence  and  provide 
vital support to regions following the COVID-
19  pandemic.  The  Recovery  Assistance  for 
Cohesion and the Territories of Europe instrument 
(REACT-EU) (30)  under  NextGenerationEU  provides 
EUR  278  million  on  top  of  the  2014-2020 
cohesion  policy  allocation  for  Slovenia.  Of  the 
additional  EU  funding,  EUR  117  million  is  being 
used to strengthen the resilience of the healthcare 
system, for the benefit of people across the entire 
country,  and  EUR  110  million  is  set  to  boost  the 
green  and  digital  transition  in  more  than  2 500 
firms.  With  SAFE  (Supporting  Affordable  Energy), 
the 2014-2020 cohesion policy funds may also be 
mobilised  by  Slovenia  to  support  vulnerable 
households, 
jobs  and  companies  particularly 
affected by high energy prices. 

Graph A4.3: Cohesion policy funds contribution to 
the SDGs in 2014-2020 and 2021-2027 in 
Slovenia 

5 largest contributions to SDGs in million (EUR) current prices.  
Source: European Commission  

In both 2014-2020 and 2021-2027, cohesion 
policy  funds  have  contributed  substantially 
to 
the  Sustainable  Development  Goals 
(SDGs).  These  funds  support  11  of  the  17  SDGs, 
notably  SDG  9 
innovation  and 
‘Industry, 
infrastructure’ and  SDG  7  ‘Affordable  and  clean 
energy’ (31).  

Other  EU  funds  make  significant  resources 
available for Slovenia. The common agricultural 
policy  (CAP)  made  EUR  2.3  billion  available  in 

(30)  REACT-EU allocation on Cohesion Open Data. 

(31)  Other EU funds contribute to the implementation of the 
SDGs. In 2014-2022, this includes both the European 
Agricultural Fund for Rural Development (EARDF) and the 
European Maritime and Fisheries Fund (EMFF). 

for 

Fund 

Agricultural 

2014-2022, and will continue to support Slovenia 
with  EUR  1.2  billion  in  2023-2027.  The  two  CAP 
Funds  (European  Agricultural  Guarantee  Fund  and 
European 
Rural 
Development),  contribute  to  the  European  Green 
Deal while ensuring long-term food  security. They 
promote  social,  environmental  and  economic 
sustainability  and  innovation  in  agriculture  and 
rural  areas,  in  coordination  with  other  EU  funds. 
The  European  Maritime  and  Fisheries  Fund  made 
EUR 29 million available to Slovenia in 2014-2020 
and 
the  European  Maritime,  Fisheries  and 
Aquaculture  Fund  allocates  EUR  24  million  in 
2021-2027.  

Slovenia  also  benefits  from  other  EU 
programmes,  notably  the  Connecting  Europe 
Facility,  which  under  CEF  2  (2021-2027)  has  so 
far  allocated  EU  funding  of  EUR  118.7  million  to 
seven  specific  projects  on  strategic  transport 
networks.  Similarly,  Horizon  Europe  has  so  far 
allocated  nearly  EUR  91  million  to  Slovenian  R&I 
on  top  of  the  EUR  380  million  earmarked  under 
the  previous  programme  (Horizon  2020).  The 
Public  Sector  Loan  Facility  set  up  under  the  Just 
Transition  Mechanism  makes  EUR  20  million  of 
grant  support  from  the  Commission  available  for 
projects located in Slovenia for 2021-2027, which 
will  be  combined  with  loans  from  the  EIB,  to 
support  investments  by  public  sector  entities  in 
just transition regions.  

received 

support  under 

the 
Slovenia 
European  instrument  for  temporary  support 
to  mitigate  unemployment  risks 
in  an 
emergency  (SURE)  to  finance  short-time  work 
schemes  and  other  similar  measures  to  mitigate 
the  impact  of  COVID-19.  The  Council  granted 
financial  assistance  to  Slovenia  of  EUR  1.113 
billion  in  loans,  which  supported  around  68%  of 
workers and 78% of firms in 2020. 

Instrument 
designing 

(TSI) 
The  Technical  Support 
and 
in 
Slovenia 
supports 
implementing  growth-enhancing 
reforms, 
including  those  set  out  in  its  recovery  and 
resilience  plan  (RRP).  Slovenia  has  received 
significant  support  since  2016.  Examples (32) 
include support for reforms of the pension system 
and  the  public  administration,  the  justice  system 
and taxation of investment funds.   

(32)  Country factsheets on reform support are available here. 

31 

1.1429733952982791.26465864734634402004006008001.0001.2001.400SDG 9 Industry,innovation,infrastructureSDG 8 Decent workand economicgrowthSDG 7 Affordableand clean energySDG 1 No povertySDG 4 QualityeducationEU CP 2014-2020 (millions EUR)EU CP 2021-2027 (millions EUR) 
  
                                                 
                                                 
ANNEX 5: RESILIENCE 

This  Annex  illustrates  Slovenia’s  relative 
resilience capacities and vulnerabilities using 
the  Commission’s 
resilience  dashboards 
(RDB) (33).  Comprising  a  set  of  124  quantitative 
indicators,  the  RDB  provide  broad  indications  of 
Member  States’  ability  to  make  progress  across 
four interrelated dimensions: social and economic, 
green, digital, and geopolitical. The indicators show 
vulnerabilities (34)  and  capacities (35)  that  can 
become  increasingly  relevant,  both  to  navigate 
ongoing  transitions  and  to  cope  with  potential 
future shocks. To this end, the RDB help to identify 
areas  that  need  further  efforts  to  build  stronger 
and  more  resilient  economies  and  societies.  They 
in  Table  A5.1  as  synthetic 
are  summarised 
resilience 
illustrate  the  overall 
relative  situation  for  each  of  the  four  dimensions 
and  their  underlying  areas  for  Slovenia  and  the 
EU-27 (36). 

indices,  which 

and  geopolitical  dimensions.  Slovenia  shows 
stronger  capacities  than  the  EU  average  in  the 
areas  ‘ecosystems,  biodiversity  and  sustainable 
agriculture’,  ‘digitalisation  for  public  space’,  ‘raw 
material and energy supply’ and ‘value chains and 
trade’.  There  is  room  for  improving  capacities 
compared to the EU regarding the digitalisation for 
personal  space  and  industry,  as  well  as  in  areas 
‘cybersecurity’, 
and 
‘financial 
‘security and demography’. 

globalisation’ 

Table A5.1: Resilience indices summarising the 
situation across RDB dimensions and areas 

According  to  the  set  of  resilience  indicators 
under  the  RDB,  Slovenia  generally  displays 
lower  vulnerabilities  compared  to  the  EU 
average. Slovenia shows low vulnerabilities in the 
social  and  economic  dimension  of  the  RDB, 
medium-low  vulnerabilities 
in  the  geopolitical 
dimension, and medium vulnerabilities in the green 
similar 
and 
vulnerabilities to the EU average in all areas of the 
green  dimension  and  some  areas  of 
the 
geopolitical dimension. Slovenia has relatively low 
vulnerabilities in relation to ‘inequalities and social 
impact of the transitions’, ‘digital for personal and 
public  space’,  and  ‘security  and  demography’, 
among others. 

dimensions. 

digital 

has 

It 

Compared to the EU average, Slovenia shows 
an  overall  similar  level  of  capacities  across 
all  RDB  indicators.  It  has  medium  resilience 
capacities  in  the  digital  dimension,  and  medium-
high  capacities  in  the  social  and  economic,  green 

(1) Data are for 2021, and EU-27 refers to the value for the 
EU as a whole.  Data underlying EU-27 vulnerabilities in the 
area ‘value chains and trade’ are not available as they 
comprise partner concentration measures that are not 
comparable with Member States’ level values. 
Source: JRC Resilience Dashboards - European Commission 

(33)  For details see https://ec.europa.eu/info/strategy/strategic-
planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en; see also 2020 Strategic 
Foresight Report (COM(2020) 493). 

(34)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals. 

(35)  Capacities refer to enablers or abilities to cope with crises 
and structural changes and to manage the transitions.  

(36)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

32 

SIEU-27SIEU-27Vulnerabilities IndexHighMedium-highMediumMedium-lowLowNot availableCapacities IndexHighMedium-highMediumMedium-lowLowNot availableDimension/AreaVulnerabilitiesCapacitiesSocial and economicHealth, education and workInequalities and social impact of the transitionsGreenEconomic & financial stability and sustainabilitySustainable use of resourcesClimate change mitigation & adaptationDigitalEcosystems, biodiversity, sustainable agricultureDigital for industryDigital for personal spaceCybersecurityDigital for public spaceRaw material and energy supplyGeopoliticalValue chains and tradeFinancial globalisationSecurity and demography 
 
                                                 
 
  
 
 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

green 

transition 

Slovenia’s 
requires 
continued  action  effort  on  several  aspects, 
including  rolling  out  deploying  renewable 
energy,  developing  energy  storage,  and 
reducinge 
emissions. 
Implementation  of  the  European  Green  Deal  is 
underway  in  Slovenia;  this  Annex  provides  a 
snapshot of the key areas involved (37). 

transport 

road 

in 

these  sectors 

Slovenia  has  not  yet  defined  all  the  climate 
policy  measures  it  needs  to  reach  its  2030 
climate 
target  for  the  effort  sharing 
sectors (38).  Data  for  2021  on  greenhouse  gas 
emissions 
in  Slovenia  are 
expected  to  show  the  country  generated  far  less 
than  its  annual  emission  allocations (39).  Current 
policies  in  Slovenia  are  projected  to  reduce  these 
emissions by 9% relative to 2005 levels in 2030, 
not  sufficient  to  reach  the  effort  sharing  target 
even before it was raised in line with the EU’s 55% 
objective.  The  additional  measures  tabled  would 
bring  the  emission  reductions  to  25%,  exceeding 
the current target but not enough to reach the new 
target  to  reduce  by  27% (40).  In  its  recovery  and 
resilience  plan,  Slovenia  has  attributed  42.4 %  of 
its  Recovery  and  Resilience  Facility  allocation  to 

key  reforms  and  investments  to  attain  climate 
objectives (41). 

Graph A6.1: Thematic – greenhouse gas emissions 
from the effort sharing sectors in Mt CO2eq, 
2005-2021 

Source: European Environmental Agency. 

Slovenia’s land use sector performs strongly 
on  net  carbon  removals.  Slovenia’s  forests 
achieve  a  major  share  of  net  carbon  removals 
through  land  use.  For  2030,  Slovenia’s  target  for 
net removals by the land use, land use change and 
forestry 
removing 
sector 
146 kt CO2eq (see  Table  A6.1) (42).  The  sector  has 
been  a  carbon  sink,  except  from  2014  to  2018, 
due to large-scale disturbance events. 

(LULUCF) 

implies 

(37)  The overview in this Annex is complemented by the 

information provided in Annex 7 on energy security and 
affordability, Annex 8 on the fair transition to climate 
neutrality and environmental sustainability, Annex 9 on 
resource productivity, efficiency and circularity, Annex 11 on 
innovation, and Annex 19 on taxation. 

(38)  Member States’ greenhouse gas emission targets for 2030 
(‘effort sharing targets’) were increased by Regulation (EU) 
2023/857 (the Effort Sharing Regulation) amending 
Regulation (EU) 2018/842, aligning the action in the 
concerned sectors with the objective to reach EU-level, 
economy-wide greenhouse gas emission reductions of at 
least 55% relative to 1990 levels. The Regulation sets 
national targets for sectors outside the current EU Emissions 
Trading System, notably: buildings (heating and cooling), road 
transport, agriculture, waste, and small industry. Emissions 
covered by the EU ETS and the Effort Sharing Regulation are 
complemented by net removals in the land use sector, 
regulated by Regulation (EU) 2018/841 (the Land Use, Land 
Use Change and Forestry (LULUCF) Regulation) amended by 
Regulation (EU) 2023/839. 

(39)  Slovenia’s annual emission allocations for 2021 were some 
11.1 Mt CO2eq, and its approximated 2021 emissions were 
9.9 Mt (see European Commission, Accelerating the transition 
to climate neutrality for Europe’s security and prosperity: EU 
Climate Action Progress Report 2022, SWD(2022)343). 

(40)  See the information on the distance to the 2030 climate 

policy target in Table A6.1. Existing and additional measures 
as of 15 March 2021. 

Fossil  fuels  still  play  a  strong  role  in 
Slovenia’s  energy  mix.  In  2021,  oil  and  oil 
products accounted for a third (33%) of Slovenia’s 
gross 
inland  energy  consumption,  while  coal 
accounted  for  14%  and  natural  gas  for  12%. 
Renewable sources accounted for only 20% of the 
energy  mix,  which  was  a  0.9  percentage  point 
increase compared to 2020. Slovenia also remains 
dependent on coal for electricity generation, which 

(41)  Slovenia provides support for the green transition through 

investments of over EUR 230 million in energy efficiency and 
seismic renovation of buildings, including schools. It will also 
invest EUR 292 million in decarbonisation, digitalisation and 
in the safety of railway infrastructure transport (e.g., the 
Grosuplje railway project, which is already finished). With an 
investment of EUR 54 million, the plan supports measures to 
improve drinking water supply and water saving projects. The 
Centre for Seed, Tree growing and Forest Protection (set up 
under the recovery and resilience plan) will give direct 
support to increase the resilience of forest ecosystems and 
the forest-wood chain in adaptation to climate change by 
restoring and protecting the health, resilience and 
biodiversity of forest ecosystems and the sustainable use of 
forests and timber.  

(42)  This value is indicative and will be updated in 2025 (as 

mandated by Regulation (EU) 2023/839). 

33 

0246810121420052021Domestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
 
                                                 
      
                                                 
 
 
in 2021 accounted for 25 % of the electricity mix. 
While  renewable  energy  sources  accounted  for 
36%  of  the  electricity  mix,  hydro  power  alone 
accounted  for  31%.  The  remaining  36%  came 
from  the  production  of  the  Krško  nuclear  power 
plant. 

Graph A6.2: Energy mix (top) and Electricity mix 
(bottom), 2021 

The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste. 
Source: Eurostat. 

sources 

in  gross 

towards  2030, 

in 
Renewable  energy  remains  underused 
decarbonising  Slovenia’s  economy  and  its 
targets 
lack  ambition. 
Slovenia’s target of 27% of share of energy from 
final  energy 
renewable 
consumption  by  2030  included  in  the  NECP  was 
considered  unambitious  in  the  2020  assessment 
by the Commission. Slovenia will need to increase 
its  renewable  energy  target  in  the  updated  NECP 
to  reflect  the  more  ambitious  EU  climate  and 
energy targets in the Fit for 55 Package and in the 
REPowerEU Plan. The share of renewable energy in 
gross final energy consumption in 2021 was 25%, 
the same as in 2020, which was achieved thanks 
to  statistical  transfers.  Slovenia’s  recovery  and 
resilience  plan  contains  investment  measures  to 

improve  the  electricity  distribution  network  that 
will facilitate the penetration of renewables in the 
country’s  electricity  mix.  The  plan  also  contains 
reforms  to  promote  the  use  of  renewable  energy 
and on spatial planning in order to identify priority 
energy 
areas 
installations,  as  well  as  defining  the  applicable 
authorisation  procedures.  These  reforms  should 
enable  the  roll-out  of  new  renewable  energy 
generation capacities. 

developing 

renewable 

for 

The  energy  efficiency  actions  planned  merit 
the 
in 
implementation.  As  set  out 
swift 
country’s  NECP,  Slovenia  aims  to  reduce 
its 
primary  and  final  energy  consumption  by  35%  in 
2030.  NECP  targets  for  primary  and  final  energy 
consumption were considered to be of modest and 
low ambition respectively in the 2020 Commission 
assessment.  Based  on  the  energy  consumption 
trajectory  for  2018-2021,  Slovenia  is  expected to 
be on track to meet its 2030 targets for PEC and 
FEC,  as  these  were  notified  in  its  NECP (43). 
Buildings account for a substantial share of these 
savings,  with  an  energy  efficiency  target  for  the 
residential sector to reduce energy by 25% and to 
reduce  greenhouse  gases by  up  to  45%  from the 
2020  baseline.  Slovenia’s  recovery  and  resilience 
plan  contains  action  to  support  this  target  with 
reforms  and  investments  in  energy  renovation  of 
public  sector  buildings  and  energy  efficiency 
measures for industry. It also plans investments in 
restructuring  three  district  heating  systems.  The 
success  of  the  measures  will  depend  on  the 
necessary  support  measures,  such  as  technical 
and administrative assistance. To this end, setting 
up  and  expanding  one-stop  shops  has  proved  a 
successful  approach,  particularly  for  the  private 
residential sector. 

Slovenia  needs  to  take  action  to  promote 
sustainable mobility. In Slovenia, road transport 
represented 92% of the transport CO2 emissions in 
2020  (EU-average:  77%).  The  market  for  zero- 
emission vehicles is developing slowly in Slovenia. 
The  authorities  are  preparing  plans  to  achieve  a 
more  ambitious  roll-out  of  recharging  points;  this 
may  stimulate  the  take-up  of  electric  vehicles. 
is 
About  half  of  Slovenia’s  railway  network 
electrified.  Transport  in  Slovenia  is  still  heavily 
dependent  on  fossil  fuels,  and  sustainable modes 

(43)  After the conclusion of the negotiations for a recast EED, the 
ambition of both the EU and national targets as well as of 
the national measures for energy efficiency to meet these 
targets is expected to increase. 

34 

25%3%36%36%Solid fossil fuels, peatand oil shaleGasRenewablesNuclear14%12%33%21%20%Solid fossil fuels, peatand oil shaleGasOilNuclearRenewables 
       
                                                 
of transport have yet to be taken up more broadly. 
Air quality has improved in recent years. However, 
transport  still  has  a  heavy  impact  on  air  quality, 
particularly  through  certain  pollutants  such  as 
PM2.5  and  NOx.  Slovenia  is  investing  in  clean 
mobility and in upgrading the monitoring network, 
including through measures set out in its recovery 
and resilience plan. 

Graph A6.3: Thematic – environmental investment 
needs and current investment, p.a. 2014-2020 

Source: European Commission 

Slovenia  would  benefit  from  investing  more 
in environmental protection and in measures 
protecting  biodiversity,  promoting  circular 
economy,  and  tackling  pollution (44).  Between 
2014 and 2020, Slovenia invested about EUR 846 
million  per  year  to  meet 
its  environmental 
objectives,  against  investment  needs  of  at  least 
EUR 1.3  billion,  leaving  a  gap  of  about  EUR 474 
million  per  year  (see  Graph  A6.3) (45).  40.5%  of 
land in Slovenia is covered by nature areas under 
protection - Natura 2000 (46), protected areas and 
valuable  natural  features  -  but  over  a  half  of  its 
species and nearly two thirds of its habitats are in 

(44)  Environmental objectives include pollution prevention and 

control, water management and industries, circular economy 
and waste, biodiversity and ecosystems (European 
Commission, 2022, Environmental Implementation Review, 
country report Slovenia) 

(45)  When also accounting for needs estimated at EU level only 

(e.g., water protection, higher circularity, biodiversity 
strategy). 

(46)  In 2021, Slovenia had 40.5% terrestrial protected areas 

(Natura 2000 and nationally designated areas), against the 
EU average of 26.4% (European Environment Agency, 2023, 
Natura 2000 Barometer). 

35 

bad  or  poor  conservation  status (47),  calling  for 
greater action and investment in the conservation 
and  management  of  protected  areas.  Slovenia’s 
area  of  marine  waters  designated  for  protection 
would  warrant  expansion  as  only  5%  are 
protected.  Further  infrastructure  investments  are 
needed  in  wastewater  collection  and  treatment 
and 
flood 
prevention  and  river  restoration.  In  addition,  the 
chemical  status  of  water  bodies  in  Slovenia 
warrants  action  to  improve  their  quality  and 
reduce  the  concentration  of  nitrates  in  surface 
waters (see also Annex 9). 

for  nature-based 

solutions 

for 

Climate  change 
is  affecting  agriculture, 
biodiversity,  and  forestry  in  Slovenia,  among 
other  sectors.  Changes  to  meteorological  and 
hydrological patterns and extreme weather events, 
especially  droughts,  forest  fires,  floods,  heavy 
precipitation,  storm  and  hail,  frost,  and  heat 
waves,  are  having  significant  negative  effects  on 
agriculture  and  forestry.  Many  plant  species  are 
sensitive  to  higher  temperatures  and  summer 
droughts.  Slovenia’s  recovery  and  resilience  plan 
contains  measures  to  mitigate  the  effects  of 
climate  change  and  climate  related  disasters  on 
forest biodiversity and to strengthen prevention to 
increase  protection  against  floods.  Flood  is  the 
highest risk, but its potential economic impacts are 
contained  thanks  to  good  insurance  coverage. 
Slovenia’s adaptation priorities are laid down in its 
strategic  climate  adaptation  framework.  The 
framework,  adopted  in  late  2016,  merits  an 
update, though.  

Slovenia  still  provides  fossil  fuel  and  other 
environmentally  harmful  subsidies 
that 
should  be  considered  for  reform,  while 
ensuring  food  and  energy  security  and 
mitigating  social  effects.  Environmentally 
harmful  subsidies  have  been  identified,  via  an 
initial  assessment,  in the agriculture,  forestry  and 
fishing, electricity, gas, steam and air conditioning, 
transportation  and  storage  and  services  sectors. 
Examples  of  such  subsidies  include  the  reduced 
VAT  rate  for  fertilisers  and  pesticides,  the  energy 
tax relief for companies in agriculture and forestry 
for  gas  oil,  the  reimbursement  of  excise  duty  on 
diesel  used  in  freight  and  other  categories  of 
passenger  transport  or  the  refund  scheme  for 

(47)  European Commission, European Environment Agency, 2023, 
Biodivewrsity information system for Europe - Slovenia. 

11244911211657239525244242680100200300400500600Pollutionprevention andcontrolWater (industries,excl. protection)Circular Economy(incl. waste)Biodiversity andecosystemsR&I&D and otherEUR million (at current prices)Current investmentTotal need 
       
                                                 
                                                 
energy-intensive  industry  under  conditions (48).  A 
mapping  of  all  environmentally  harmful  subsidies 
by  Slovenia  would  help  prioritise  candidates  for 
reform. 

to 

has 

scope 

to 
contain 

tax 
employ 
Slovenia 
instruments 
environmental 
pollution. Slovenia applies the extended producer 
responsibility  (EPR)  schemes  for  packaging  waste 
(both  household  and  non-household)  but  without 
advanced  fee  modulation,  which  can  incentivise 
producers to design easily recyclable products, and 
therefore  create  favourable  conditions  for  higher 
recycling rates (see Annex 19).  

(48)  Fossil fuel figures in EUR of 2021 from the 2022 State of 

the Energy Union report. Initial assessment of 
environmentally harmful subsidies done by the Commission 
in the 2022 toolbox for reforming environmentally harmful 
subsidies in Europe, using OECD definitions, and based on the 
following datasets: OECD Agriculture Policy Monitoring and 
Evaluations; OECD Policy Instruments for the Environment 
(PINE) Database; OECD Statistical Database for Fossil Fuels 
Support; IMF country-level energy subsidy estimates. Annex 4 
of the toolbox contains detailed examples of subsidies on 
the candidates for reform. 

36 

 
                                                 
Table A6.1: Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources: (1) Historical and projected emissions, as well as Member States’ climate policy targets and 2005 base year emissions 
under the Effort Sharing Decision (for 2020) are measured in global warming potential (GWP) values from the 4th Assessment 
Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ climate policy targets and 2005 base 
year emissions under the Effort Sharing Regulation (for 2030) are in GWP values from the 5th Assessment Report (AR5). The 
table above shows the base year emissions 2005 under the Effort Sharing Decision, using AR4 GWP values. Emissions for 2017-
2021 are expressed in percentage change from 2005 base year emissions, with AR4 GWP values. 2021 data are preliminary. The 
table shows the 2030 target under Regulation (EU) 2023/857 that aligns it with the EU’s 55% objective, in percentage change 
from 2005 base year emissions (AR5 GWP). Distance to target is the gap between Member States’ 2030 target (with AR5 GWP 
values) and projected emissions with existing measures (WEM) and with additional measures (WAM) (with AR4 GWP values), in 
percentage change from the 2005 base year emissions. Due to the difference in global warming potential values, the distance to 
target is only illustrative. The measures included reflect the state of play as of 15 March 2021.  
(2) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2023 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 
amending Regulation (EU) 2018/841 (LULUCF Regulation) – Annex IIa, kilotons of CO2 equivalent, based on 2020 submissions. 
(3) Renewable energy and energy efficiency targets and national contributions are in line with the methodology established under 
Regulation (EU) 2018/1999 (Governance Regulation).  
(4) Percentage of total revenue from taxes and social contributions (excluding imputed social contributions). Revenue from the EU 
Emissions Trading System is included in environmental tax revenue.  
(5) Expenditure on gross fixed capital formation for the production of environmental protection services (abatement and 
prevention of pollution) covering government, industry, and specialised providers.  
(6) European Commission, Study on energy subsidies and other government interventions in the European Union, 2022 edition.  
(7) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters. This 
indicator is based on modelling of the current risk from floods, wildfires and windstorms as well as earthquakes, and an 
estimation of the current insurance penetration rate. The indicator does not provide information on the split between the 
private/public costs of climate-related disasters. A score of 0 means no protection gap, while a score of 4 corresponds to a very 
high gap (EIOPA, 2022).  
(8) Sulphur oxides (SO2 equivalent), ammonia, particulates < 10 µm, nitrogen oxides in total economy (divided by GDP).  
(9) Battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV). 

37 

2030200520172018201920202021target/valueWEMWAMGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq; %; pp11.8-8%-7%-9%-18%--27.0%-18-2Net carbon removals from LULUCF (2)kt CO2eq-7,2249491,046-3,345-3,143-3,106-146n/an/a200520172018201920202021Share of energy from renewable sources in gross final consumption of energy (3)%20%22%21%22%25%25%27%Energy efficiency: primary energy consumption (3)Mtoe7.26.76.76.56.16.36.4Energy efficiency: final energy consumption (3)Mtoe5.14.95.04.94.44.74.7201620172018201920202021201920202021Environmental taxes (% of GDP)% of GDP3.93.73.43.32.92.82.42.22.2Environmental taxes (% of total taxation) (4)% of taxation 10.39.89.18.97.97.35.95.65.5Government expenditure on environmental protection% of total exp.1.21.01.21.31.21.31.71.61.6Investment in environmental protection (5) % of GDP0.70.50.70.6--0.40.40.4Fossil fuel subsidies (6)EUR2021bn0.10.10.10.10.10.153.050.0-Climate protection gap (7) score 1-41.51.81.5Net greenhouse gas emissions1990 = 10095.095.095.092.086.084.076.069.072.0Greenhouse gas emission intensity of the economykg/EUR'100.490.480.450.430.43-0.310.300.26Energy intensity of the economykgoe/EUR'100.170.170.160.150.15-0.110.11-Final energy consumption (FEC)2015=100103.6105.0105.0103.093.6100.2102.994.6-FEC in residential building sector2015=100101.799.293.090.793.599.5101.3101.3106.8FEC in services building sector2015=100108.3105.8104.499.492.092.6100.194.4100.7Smog-precursor emission intensity (to GDP) (8)tonne/EUR'101.070.970.960.910.89-0.930.86-Years of life lost due to air pollution by PM2.5per 100.000 inh.822.3850.6825.7622.9566.8-581.6544.5-Years of life lost due to air pollution by NO2per 100.000 inh.117.9133.9104.6100.269.0-309.6218.8-Nitrates in ground watermg NO3/litre14.213.314.412.612.5-21.020.8-Land protected areas% of total52.653.6-40.440.440.526.226.426.4Marine protected areas% of total---5.2-5.010.7-12.1Organic farming% of total utilised agricultural area9.19.610.010.410.310.88.59.1-201720182019202020212022202020212022Share of zero-emission vehicles (9)% in new registrations0.50.60.83.13.14.65.48.910.7Number of AC/DC recharging points (AFIR categorisation)---58815431700188626330028432518Share of electrified railways%50.550.550.550.550.550.456.6n/a56.6Hours of congestion per commuting driver per year26.226.725.8n/an/an/a28.7n/an/a'Fit for 55'DistanceProgress to policy targetsNational contribution to 2030 EU targetSloveniaEUMobilityFiscal and financialindicatorsEnergyPollutionBiodiversityClimate 
 
      
 
ANNEX 7: ENERGY SECURITY AND AFFORDABILITY 

to 

Slovenia  managed 
decrease 
its 
re-
dependence  on  Russian  gas  by 
establishing  gas  imports  from  Algeria  in 
2023.  Limited  availability  of  the  domestically 
in  electricity 
produced  coal  needed  primarily 
generation, coupled with high reliance on imported 
fossil  fuels,  such  as  oil  products  and  natural  gas 
make Slovenia's economy sensitive to global price 
developments,  requiring  it  to  step  up  its  clean 
energy  transition.  This  Annex (49)  sets  out  actions 
carried out by Slovenia to achieve the REPowerEU 
objectives,  including  through  the  implementation 
of  its  recovery  and  resilience  plan,  in  order  to 
improve  energy  security  and  affordability  while 
accelerating  the  clean  energy  transition,  and 
contributing to enhancing the EU’s competitiveness 
in the clean energy sector (50). 

have  access  to LNG  terminals  in  Italy,  the  closest 
one being in Rovigo. It will gain substantial access 
to  the  Croatian  Krk  LNG  terminal  once  the 
interconnector  between  Croatia  and  Slovenia  is 
realised  (on  the  5th  Projects  of  Common  Interest 
(PCI) list). Potential enhancement of the Slovenian 
transmission  network  will  be  necessary  if  the 
transmission  system  operators  of  Slovenia  and 
Austria  decide  to  implement  the  reverse  flow 
project at the Ceršak-Murfeld interconnection point 
to  enable  flows  from  the  Krk  terminal  through 
Slovenia  to  Austria.  Slovenia  has  no  underground 
gas storage facility. According to the Gas Storage 
Regulation (52),  Slovenia  was  required  to  have 
arrangements for the storage of at least 0.13 bcm 
(15%  of  its  annual  consumption)  in  neighbouring 
countries  with  gas  storage  facilities  by  1 
November 2022. 

time 

Prior  to  Russia´s 
invasion  of  Ukraine, 
Slovenia was effectively reliant on Russia as 
the  single  natural  gas  supplier  to  the 
country,  directly  (14  %),  or  through  Austria 
(85  %) (51).  In  November  2022,  Geoplin,  its 
largest  natural  gas  supplier,  concluded  a  three-
year contract with Algerian Sontrach, starting on 1 
January 2023. This way, gas imports from Algeria 
have been re-established in greater volume for the 
they  were 
since  2012,  when 
first 
discontinued  in  favour  of  molecules  from  Russia. 
Natural  gas 
imported  through 
pipelines  in  Tunisia,  the  Mediterranean  Sea  and 
Italy  up  to  the  entry  point  in  the  Slovenian  gas 
pipeline  system  Gorizia-Šempeter.  The  contracted 
amount  will  amounts  to  0.3  billion  cubic  meters 
(bcm)  or  a  third  of  Slovenia’s  natural  gas  supply, 
which  in  2021  reached  0.92  bcm.  However,  the 
unidirectional Ceršak-Murfeld interconnection point 
with  Austria  will  continue  to  serve  as  the  main 
natural  gas  entry  point.  Slovenia  does  not  have  a 
liquefied  natural  gas  (LNG)  facility,  but  it  does 

is  now  being 

(49)  It is complemented by Annex 6 as the European Green Deal 
focuses on the clean energy transition, by Annex 8 on the 
actions taken to mitigate energy poverty and protect the 
most vulnerable ones, by Annex 9 as the transition to a 
circular economy will unlock significant energy and resource 
savings, further strengthening energy security and 
affordability, and by Annex 12 on industry and single market 
complementing ongoing efforts under the European Green 
Deal and REPowerEU. 

(50)  in line with the Green Deal Industrial Plan COM(2023) 62 
final, and the proposed Net-Zero Industry Act COM(2023) 
161 final. 

(51)  Eurostat (2021), share of Russian imports over total imports 
of natural gas and crude oil. For the EU-27 average, the total 
imports are based on extra-EU-27. 

electricity 

generation 

Fossil  fuels,  particularly  coal,  have  a  strong 
role  in  the  country’s  electricity  generation 
mix,  and  the  current  energy  crisis  has  given 
rise  to  additional  challenges.  Nuclear  energy 
and  renewables  (primarily  hydropower)  play  a 
dominant  role  in  the  country’s  electricity  mix,  but 
coal-fired 
facilities 
accounted  for  24%  of  gross  electricity  production 
in  2021  (see  Annex  6).  Limited  availability  of 
domestically  produced  coal  from  the  Velenje  coal 
mine  led  to  the  temporary  closure  of  the  Šoštanj 
thermal  power  plant  in  late  2022.  This  coincided 
with  the maintenance  of  the  Krško  nuclear  power 
plant.  As  a  result,  there  was  a  significant  drop  in 
domestic electricity production, forcing Slovenia to 
rely  on  electricity  imports.  Under  the  national 
strategy  for  phasing  out  coal  and  restructuring 
coal  regions  adopted  in  January  2022,  the  coal-
fired thermal power plant Šoštanj will be closed by 
2033.  Although  limited  in  use  for  electricity 
generation  (see  Annex  6), natural  gas  still  has  an 
important role in the country’s economy. Over the 
period August 2022  – March 2023, 13.8% of gas 
consumption has been saved in Slovenia compared 
to  the  previous  5-years  average.  The  measures 
introduced  to  enable  gas  demand-reduction  are 
based  on  urging  consumers  to  voluntarily  limit 
their  consumption  and  switch  to  alternative  fuels, 
especially consumers whose consumption exceeds 
800 000 KWh/year. Also, energy rationing is being 
imposed  on  government  buildings.  Strengthening 

(52)  Implementing Regulation (EU) 2022/2301 of 23 November 
2022 setting the filling trajectory with intermediary targets 
for 2023 for each Member State with underground gas 
storage facilities on its territory and directly interconnected 
to its market area 

38 

 
 
                                                 
                                                 
 
 
Graph A7.1: Share of gas consumption per sector, 
2021 

of  implementation  of  energy  efficiency  measures 
particularly in the building sector (Annex 6), would 
bring about significant energy savings. Slovenia is 
carrying  out  a  low  number  of  checks  on  products 
covered  by  ecodesing  and  energy  labelling.  This 
generates  concerns  with  respect  to  the  level 
playing  field  among  economic  operators  and 
uncertainty  as  to  the  compliance  levels  of  the 
concerned products, and therefore possible missed 
energy and CO2 saving (53).  

increased 

to  2021 

Electricity grids need to be further upgraded 
for greater penetration of renewable energy. 
Grid  upgrades  are  particularly  necessary  on  the 
distribution network to enable further deployment 
of solar photovoltaics and charging infrastructure, 
accompanied  by  energy  storage.  This  measure  is 
supported through the recovery and resilience plan 
(see  Annex  6).  Crucial  as  well  is  the  need  for 
enhancing the smartness of the grid. Slovenia has 
one of the highest interconnection levels in the EU, 
with  75.6%  in  2022.  A  significant  increase  has 
(65.8%). 
been  observed  compared 
Contributing  to  the 
interconnection 
levels  were  EU  funded  projects  in  the  region, 
namely  Slovenia  –  Hungary  interconnection  and 
the  Sinco.GRID  project,  completed 
in  2021. 
Interconnection  between  Slovenia  and  Hungary 
was  established  for  the  first  time  with  the 
completion  of  the  Cirkovce-Pince-Hévíz  power 
transmission  line  in  June  2022.  The  project, 
supported  through  the  Connecting  Europe  Facility 
for  Energy,  included  construction  of  the  80.5  km-
long double circuit 400 kV overhead line Cirkovce-
Pince  and  the  new  400  kV  Cirkovce  substation, 
both in Slovenia. It also helped to improve existing 
connections  with  Croatia.  The  new  interconnector 
and substation made it possible to decrease power 
flows  between  Hungary  and  Croatia  and  Slovenia 
and  Croatia.  It  also  opened  alternative  paths  for 
transferring energy in the region, making its supply 
more secure. Furthermore, “Greenswitch” (included 
in the 5th PCI list), will optimize use of the existing 
power  infrastructure  and  allow  the  integration  of 
new  technologies  and  advanced  functionalities  in 
the  transmission  and  distribution  networks  in 
Austria,  Croatia  and  Slovenia.  Another  bottleneck 
for  the  faster  deployment  of  renewable energy is 
the  underdeveloped  and 
insufficient  energy 
storage. For the rolling out of intelligent metering 
systems, Slovenia’s deployment rate was at 88.1% 
in October 2022. 

(53)  The internet-supported information and communication 
system for the pan-European market surveillance 

39 

Source: Eurostat 

Graph A7.2: Share of gas consumption per 
industrial sector (% of total industry gas 
consumption) 

Source: Eurostat 

Slovenia  witnessed  unprecedented  energy 
price  increases  liable  to  have  irreversible 
negative  effects  on  its  industrial  sector. 
Industry  is  the  single  largest  consumer  of  natural 
gas,  accounting  for  62%  of  all  gas  consumed  in 
2021. The largest industrial  consumers of natural 
gas are in the sectors of iron and steel, as well as 
paper.  The  distributional  impacts  of  the  rise  in 
energy prices and the distorted trade links caused 
by  Russia’s  invasion  of  Ukraine  are  covered  in 
Annex  12.  In  efforts  to  alleviate  the  impact  of 
rising energy prices on households and the private 
sector, Slovenian government has taken a series of 
measures, 
financial 
resources  to  support  the  latter in  2023.  To  better 
target measures, in October 2022 the government 
adopted  a  regulation  on  the  determination  of 

considerable 

allocating 

19.7%62.3%0.6%2.9%14.5%0.0%EnergyIndustryTransportServices and public sectorHouseholdsAgriculture, forestry andfishery0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0%Iron and steelChemical and petrochemicalNon-ferrous metalsNon-metallic mineralsTransport equipmentMachineryMining and quarryingFood, beverages and tobaccoPaper, pulp and printingWood and wood productsConstructionTextile and leather 
                                                 
   
 
   
energy-poor households, setting out the definition 
and criteria for determining energy poverty (54). 

Graph A7.3: Slovenia´s retail energy prices for 
industry (top) and households (bottom) 

(1) On electricity, the band consumption is DC for households 
and ID for industry 
(2) On gas, the band consumption is D2 for households and I4 
for industry 
Source: Eurostat 

from 

generation 

Slovenia has demonstrated a slow uptake of 
electricity 
renewable 
sources. In 2022, Slovenia registered an increase 
in  deployment  of  174  MW  of  renewable  energy, 
driven  by  the  increased  uptake  of  solar  PV 
installations (55). There are no offshore wind farms 
in Slovenia, and the development of onshore wind 
energy  has  stagnated  for  years.  Permitting 
installing  grid-scale  renewable 
procedures  for 
energy installations remain a bottleneck, although 
the country has taken some measures to improve 
the  legal  framework,  with  the  adoption  of  the 
amendments  to  the  Construction  Act  and  the 
Spatial  Planning  Acts,  which  seek  to  speed  up 
certain  planning  and  permit-granting  procedures. 
Slovenia  has  also  received  technical  assistance 
that  identifies  the  barriers  to  scaling  up  the 
deployment of renewable energy, which are being 
addressed  in  the  new  Draft  Act  on  the  Siting  of 

(54)  https://www.uradni-list.si/glasilo-uradni-list-rs/vsebina/2022-
01-3199/uredba-o-merilih-za-opredelitev-in-ocenjevanje-
stevila-energetsko-revnih-gospodinjstev 

(55)  IRENA, Renewable capacity statistics 2023 

40 

resilience  plan).  Slovenian 

Installations  for  the  Production  of  Electricity  from 
Renewable  Energy  Sources  (part  of  the  recovery 
and 
transmission 
system  operator  and  the  distribution  system 
operators, covering all five distribution areas, have 
produced  reports  identifying  suitable  locations  for 
connecting photovoltaic panels to the transmission 
and  distribution  networks (56) (57).  In  terms  of 
hydrogen,  Slovenia  lacks  a  dedicated  National 
Hydrogen Strategy. 

According  to  the  latest  available  data,  the 
number  of  Energy  Union  patent  families 
Slovenia  has  decreased,  as  have  private 
research and innovation (R&I) investments in 
Energy  Union  R&I  priorities.  The  number  of 
patent  families  in  Energy Union  R&I  priorities  has 
fluctuated,  peaking  at  7.1  patent  families  per 
million inhabitants in 2018, only to decrease to 5.1 
in  2019.  This  last  figure  is  well  below  the  EU 
(around  20  patents  per  million 
average 
inhabitants).  In  Slovenia,  patent  families  in  2019 
were  mainly  spread  across  sustainable  transport, 
efficient  systems  and  smart  systems.  Private  R&I 
investments  in  Energy  Union  R&I  priorities  have 
slightly decreased from 0.065% of GDP in 2014 to 
0.046% in 2019, which is again below the overall 
EU average of 0.17%. In 2019, 50% of private R&I 
investments  in  Energy  Union  R&I  priorities  were 
aimed at smart systems. In 2021, hydropower and 
geothermal  energy  sectors  accounted  for  more 
than  half  of  the  5.1  thousand  jobs  in  renewable 
energy.  In  the  clean  energy  value  chain,  in  2019, 
over  40%  of  jobs  were  in  renewable  energy 
generation 
(operation,  maintenance,  etc.).  A 
positive  figure  worth  highlighting  is  that  in  2020, 
Slovenia  was  among  the  top  10  EU  countries  for 
direct and indirect jobs in the EU heat pump value 
chain (58).  The  latest  (first  quarter  of  2023)  on 
labour  shortage  in  manufacturing  of  electrical 
equipment (59)  reports  around  50%  of  labour 

(56)  https://www.energetika-

portal.si/fileadmin/dokumenti/publikacije/sodo/pr_2_pregled_
moznosti_prikljucitve_vecjih_se_na_do.pdf 

(57)  https://www.energetika-

portal.si/fileadmin/dokumenti/publikacije/sodo/pr_3_julij_moz
nosti_prikljucitve_vecjih_se_na_po.pdf 

(58)  Employment in the heat pump sector covers several stages 

of the value chain (research and development and 
innovation, manufacturing, installing and maintenance). 

(59)  NACE 27: Manufacture of electrical equipment’ used as a 

proxy for renewable energy manufacturing industry as many 
renewable energy technologies fall under this category. It is 
also used partially as a proxy for renewables industrial 
ecosystem in the EU Industrial Strategy 

050100150200250€/MWhGas SloveniaGas EUElectricity SloveniaElectricity EU050100150200250300€/MWhGas SloveniaGas EUElectricity SloveniaElectricity EU 
   
                                                 
                                                 
shortage  well  above  the  EU  average  of  around 
30%. This figure is a clear indicator of the demand 
for  workers  in  the  sector.  The  mineral-intensive 
transition 
require  a 
to  clean  energy  will 
considerable supply of many critical minerals (see 
Annex 5). 

Graph A7.4: Private R&I investment in Energy 
Union R&I priorities 

Source: JRC SETIS (2022) 

41 

46%23%21%34%16%50%20%28%17%13%13%19%201020142019[% per priority]CCUSNuclear safetySustainable transportEfficient systemsSmart systemRenewables192422Total [mn Euro] 
   
 
 
Table A7.1: Key energy indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2021) 
(2) FSRU included 
(3) Venture Capital investments include Venture Capital deals (all stages) and Private Equity Growth/Expansion deals (for 
companies that have previously been part of the portfolio of a VC investment firm). 

Source: Eurostat, Gas Infrastructure Europe (Storage and LNG Transparency Platform), JRC SETIS (2022), JRC elaboration based 
on PitchBook data (06/2022) 

42 

EU20182019202020212018201920202021Import Dependency [%] 51%52%46%49%58%61%57%56%of Solid fossil fuels 19%20%18%11%44%44%36%37%of Oil and petroleum products 99%101%99%100%95%97%97%92%of Natural Gas 98%99%99%99%83%90%84%83%Dependency from Russian Fossil Fuels [%]of Hard Coal0%4%22%0%40%44%49%47%of Crude Oil 0%0%0%0%30%27%26%25%of Natural Gas 31%12%9%14%40%40%38%41%20152016201720182019202020212022Gross Electricity Production (GWh)15,10016,50016,32616,32716,10017,19115,877-Combustible Fuels5,0815,7305,6105,3975,2875,2394,715-Nuclear5,6485,7156,2855,7765,8216,3535,706-Hydro4,0914,7824,1414,8934,6835,2254,997-Wind6666666-Solar 274267284255303368453-Geothermal 0000000-Other Sources0000000-Net Imports of Electricity (GWh)-48-1,176-516-502-319-2,003-270-   As a % of electricity available for final consumption 0%-9%-4%-4%-2%-15%-2% -Electricity Interconnection (%)--83.60%73.63%76.2%78.9%65.8%75.6%20152016201720182019202020212022*Gas Consumption (in bcm)0.80.90.90.90.90.91.00.8Gas Imports - by type (in bcm)0.80.90.90.90.90.90.9-Gas imports - pipeline0.80.90.90.90.90.90.9-Gas imports - LNG0.00.00.00.00.00.00.0-Gas Imports - by main source supplier (in bcm)* (1)Austria0.50.50.70.60.80.80.8-Russia0.20.30.20.30.10.10.1-Algeria0.00.00.00.00.00.00.0-Italy0.00.00.00.00.00.00.0-Not specified0.00.00.00.00.00.00.0-2019202020212022LNG TerminalsNumber of LNG Terminals (2)0000LNG Storage capacity (m3 LNG)0000Underground StorageNumber of storage facilities0000Operational Storage Capacity (bcm)00002019202020212022VC investments in climate tech start-ups and scale-ups (EUR Mln) (3)as a % of total VC investments in Slovenian.a.n.a.n.a.n.a.Research & Innovation spending in Energy Union R&i priorites (2)Public R&I (EUR mln)n.a.n.a.n.a.n.a.Public R&I (% GDP)n.a.n.a.n.a.n.a.Private R&I (EUR mln)22.1n.a.n.a.n.a.Private R&I (% GDP)0.05%n.a.n.a.n.a.ELECTRICITYSLOVENIAENERGY DEPENDENCECLEAN ENERGYDIVERSIFICATION OF GAS SUPPLIES 
 
 
 
   
 
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

in 

the 

line 

with 

This  Annex  monitors  Slovenia’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
notably  for  workers  and  households 
in 
vulnerable  situations.  To  ensure  a  fair  green 
transition 
Council 
Recommendation (60), up- and reskilling of workers 
in  declining  and 
transforming  sectors  has 
increased  strongly.  Labour  shortages  persist  in 
construction, notably posing a potential bottleneck 
in the green transition and for the implementation 
of  REPowerEU.  The  Strategy 
for  Greening 
Education  and  Research  Infrastructure  under  the 
recovery  and  resilience  plan  (RRP)  contributes  to 
the green transition (61). The European Social Fund 
Plus (ESF+) contributes to job creation, particularly 
as  regards  skills  for  the  green  transition  and 
circular economy. 

Graph A8.1: Fair transition challenges in Slovenia 

Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ projects and 
World Inequality Database (see Table A8.1).  

In  Slovenia,  employment  trends  in  energy-
intensive industries vary by sector, while the 
green  economy  expanded  and  the  labour 
market is relatively tight in construction. The 
greenhouse  gas  (GHG)  emissions  intensity  of 
Slovenia’s  workforce  declined  from  13.5  to  12.0 
tonnes per worker between 2015 and 2021, below 
the  EU  average  of  13.7  tonnes  in  2021  (see 
Graph A8.1 and Table A8.1). In 2021, employment 
in  Slovenia’s  energy-intensive 
(EII) 
represented  an  almost  stable  share  of  4.1%  of 
total  employment  (in  2020:  4.1%  vs  3.0%  in  the 
EU).  Following  a  long-term  trend,  employment  in 

industries 

(60)  Council Recommendation of 16 June 2022 on ensuring a fair 
transition towards climate neutrality (2022/C 243/04) covers 
employment, skills, tax-benefit and social protection 
systems, essential services and housing. 

mining  and  quarrying  decreased  by  6.7%  since 
2015,  whereas  jobs  in  automotive  and  basic 
metals  manufacturing 
increased  by  close  to 
23.0%. Total jobs in the environmental goods and 
services  sector  grew  by  20.8%  during  2015-19 
(EU:  +8.3%),  reaching  3.0%  of  total  employment, 
above  the  EU  average  of  2.2%  (see  Annex  9  for 
circular jobs specifically). In 2022, the job vacancy 
rate  in  construction  was  above  the  EU  average 
(7%  vs  4%) (62),  indicating  a  tight  labour  market 
that  risks  creating  bottlenecks 
in  the  green 
transition.  Moreover,  the  Slovenian  Chamber  of 
Engineers  estimates  a  decrease  in  the  number  of 
certified  engineers  by  20%  in  the  next  5  years, 
which  might  have  a  significant  impact  on  the 
realisation of investment projects, also those with 
a green dimension. In Slovenia, a pilot employment 
incentive  ‘Green  jobs’  aims  to  get  around  200 
unemployed people into green jobs, with subsidies 
paid to employers for two years. 

In 

sectors. 

Upskilling  and  reskilling  in  declining  and 
transforming sectors has strongly increased, 
especially since 2020. Skills are key for smooth 
labour  market  transitions  and  preserving  jobs  in 
transforming 
energy-intensive 
industries,  workers’  participation  in  education  and 
training  increased  at  the  second-fastest  pace  in 
the EU, from 9.6% in 2015 to 16.5% in 2022 (EU 
average: 10.4%). In Slovenia, only 25% of citizens 
believe  they  do  not  have  the  necessary  skills  to 
contribute  to  the  green  transition  (EU:  38%) (63). 
Slovenia’s  RRP  provides  support  that  strengthens 
the  capacity  of  regions  and  local  communities  to 
provide green skills and jobs. The ESF+ will support 
nation-wide  up-  and  reskilling  actions  for  the 
green  transition.  The  Just  Transition  Mechanism 
provides  training  specifically  in  the  two  coal 
regions of SAŠA and Zasavje, together with, under 
the RRP, a broader training offer at national  level 
and  flexibility  mechanisms  to  encourage 
in-
company training. 

Energy  costs  were  comparatively  high  for 
many  households  already  before  the  price 
spike  since  2021,  even  though  energy 
poverty  was  declining  in  recent  years.  The 
share of the total population unable to keep their 
homes  adequately  warm  declined  strongly  from 
5.6%  (in  2015)  to  1.7%  in  2021  (well  below  the 

(62)  Eurostat (JVS_A_RATE_R2) 

(63)  Special Eurobarometer 527. Fairness perceptions of the 

(61)  See also 2022 Country Report (Annex 6). 

green transition (May – June 2022). 

43 

00.20.40.60.811.21.41.6GHG per workerEmployment EIIEducation &training EIIEnergy povertyTransportpoverty(proxy)CarboninequalityEU LatestSI Latest (vs EU Latest)SI 2015 (vs EU Latest) 
 
  
                                                 
                                                 
 
Table A8.1: Key indicators for a fair transition in Slovenia 

Source: Eurostat (env_ac_ainah_r2, nama_10_a64_e, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-
JRC GD-AMEDI/AMEDI+ projects and World Inequality Database (WID). 

EU  average:  6.9%) (64).  In  particular,  5.5%  of  the 
population  at  risk  of  poverty  were  affected  EU: 
lower  middle-income 
16.4%)  and  1.3%  of 
households  in  deciles  4-5  in  2021  (EU:  8.2%  in 
2021). Before the energy price hikes, an estimated 
41.7%  of  the  total  population  and  78.4%  of  the 
(expenditure-based)  at-risk-of-poverty-population 
(AROP)  had  residential  expenditure  on  electricity, 
gas,  and  other  fuels (65)  above  10%  of  their 
household  budget,  standing  above  the  estimated 
EU  average  of  26.9%  and  48.2%%.  Slovenia 
tackles  energy  poverty  through  short-term (e.g. 
renovation  of  500  low-income  households)  and 
long-term 
building 
legislation) (66). 

interventions 

(e.g. 

in 

The  increased  energy  prices  in  2021-2023 
are  negatively  affecting  household  budgets 
across  the  population.  As  a  result  of  price 
changes during the August 2021 to January 2023 
period relative to the 18 months prior (see Annex 
the  absence  of  policy  support  and 
7), 
behavioural  responses,  the  share  of  individuals 
living  in  households  which  spend  more  than  10% 
of their budget on energy would have increased by 
(pps)  for  the  whole 
13.4  percentage  points 
population  and 
the 
(expenditure-based) AROP population (EU: 16.4 pps 
and  19.1 pps,) (67).  For  electricity,  expenditure 
shares  of  low  and  lower-middle  income  groups 
would  have 
the  most,  whereas 
residential expenditure for gas increased the most 
for  the  top  income  groups  in  contrast  to  EU-wide 
patterns,  as  shown  in  Graph A8.2.  Among  the 
(expenditure-based)  AROP  population,  individuals 
living in households with budget shares for private 

(6.4 pps)  among 

increased 

less 

(64)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub. 

(65)  Products defined according to the European Classification of 

Individual Consumption according to Purpose (ECOICOP): CP045. 

fuels (68)  above  6%  would  have 
transport 
increased by more than the EU average (14.0 pps 
vs  5.3  pps),  reaching  47.5%  in  January  2023, 
above  the  EU  average  (37.9%)  The  RRP  includes 
measures to promote the lower use of fossil fuels 
and sustainable solutions for housing. 

Graph A8.2: Distributional impacts of energy prices 
due to rising energy expenditure (2021-2023) in 
Slovenia 

Mean change of energy expenditure as a percentage (%) of 
total expenditure per income decile (D) due to observed price 
changes (August 2021 – January 2023 relative to the 18 
months prior), excl. policy support and behavioural responses.  
Source: EMPL-JRC GD-AMEDI/AMEDI+ projects, based on 
Household Budget Survey 2015 and Eurostat inflation data 
for CP0451 and CP0452.           

Access  to  public  transport  in  rural  areas  is 
perceived to be slightly worse than in the EU 
as  a  whole.  Compared  to  the  EU  averages, 
slightly  fewer  citizens perceive  public transport to 
be  of  good  availability  (50%  vs  EU:  55%)  and 
affordability  (51%  vs  EU:  54%),  though  a  similar 
share agrees that it is of good quality (61% vs EU: 
60%). As regards these perceptions, rural areas in 
Slovenia  perform  significantly  worse  than  urban 
areas  on  all  three  dimensions  and  slightly  worse 
than  rural  areas  in  the  EU  on  average (69).  The 
carbon  footprint  of  the  top  10%  of  emitters 

(66)  Reported in the national long-term renovation strategy. 

(68)  ECOICOP: CP0722. 

(67)  EMPL-JRC GD-AMEDI/AMEDI+ ; see details in the related 

(69)  EU (rural): 46%, 48% and 56% respectively. Special 

technical brief. 

Eurobarometer 527. 

44 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%ElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasD1D2D3D4D5D6D7D8D9D10SI GasSI ElectricityEU GasEU ElectricityIndicatorDescriptionSI 2015SI LatestEU LatestGHG per workerGreenhouse gas emissions per worker - CO2 equivalent tonnes13.512 (2021)13.7 (2021)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24), automotive (C29) - %44.1 (2020)3 (2020)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries - %9.616.5 (2022)10.4 (2022)Energy povertyShare of the total population living in a household unable to keep its home adequately warm - %5.61.7 (2021)6.9 (2021)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport - %33.547.5 (2023)37.1 (2023)Carbon inequalityAverage emissions per capita of top 10% of emitters vs bottom 50% of emitters55 (2020)5 (2020) 
                                                 
   
                                                 
 
  
 
among  the  population  in  Slovenia  is  about  5.0 
times  higher  than  that  of  the  bottom  50%,  same 
as the EU average. In Slovenia, the average levels 
of  air  pollution  in  2020  stood  above  the  EU 
average  (12.5  vs  11.2  µg/m  PM2.5),  with  97%  of 
the population living in regions exposed to critical 
levels  of  air  pollution (70),  leading  to  significant 
health impacts, in particular on vulnerable groups, 
and 1 238 premature deaths annually (71). 

(70)  Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3) 

(71)  EEA- Air Quality Health Risk Assessment 

45 

 
 
 
                                                 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The  circular  economy  transition  is  key  to 
climate  and 
delivering  on 
the  EU’s 
environmental  goals  and  provides 
large 
socio-economic  benefits. It  spurs  job  growth, 
innovation  and  competitiveness  and 
fosters 
resilience  and  resource  security.  The  circularity 
transition  of  industry,  the  built  environment  and 
agri-food  can  generate  significant  environmental 
improvements (see Annex 6), as they rank among 
the most resource-intensive systems. 

Continuing  on  this  path  could  make  its  economy 
even  more  circular.  Under 
its  recovery  and 
resilience plan, Slovenia is working to improve the 
strategic  and  legal  framework  for  the  circular 
economy  transition,  with  a  focus  on  extending 
producer 
recycled 
material  into  new  products,  including  circular 
public 
in 
economy 
procurement system, and establishing a one-stop-
shop to support businesses. 

responsibility, 

integrating 

principles 

green 

the 

Graph A9.1: Trend in material use 

Graph A9.2: Treatment of municipal waste 

Source: Eurostat 

Slovenia  is  on  track  towards  its  circular 
economy transition and towards meeting the 
EU’s  circular  economy  goals.  The  EU’s  2020 
circular  economy  action  plan  (CEAP)  aims  at 
doubling  circular  material  use  between  2020  and 
2030.  Slovenia’s  use  of  circular  materials 
increased  from  8.7%  in  2016  to  11%  in  2021, 
getting  closer  to  the  EU  2020  average  of  11.7%.  
The  CEAP  aims  to  significantly  decrease  the  EU’s 
material  footprint, which is above the EU  average 
in  Slovenia.  The  labour  market  benefits  of  the 
circular  transition  remain  limited,  with  a  decrease 
in  direct  circular  jobs  since  2016.  As  regards 
health and safety in circular jobs, fatal accidents in 
waste  management  and  materials  recovery  are 
above  the  average  of  all  economic  sectors  and 
above the EU average in Slovenia (72). 

Source: Eurostat 

Slovenia  manages  its  waste  efficiently,  but 
remain.  Slovenia  made 
some  challenges 
progress  in  increasing  its  recycling  rate  and 
reducing  landfilling.  This  contributed  to  achieving 
the EU’s 2020 target  of 50% for recycling with a 
wide  margin  (59.3%)  and  to  being  on  track  to 
meet the 2025 recycling targets for municipal and 
packaging  waste.  In  2021  Slovenia landfilled  only 
6% of its waste, below the EU 2035 target (10%). 
Few  illegal  landfills  have  yet  to  be  closed  and 
infringement  proceedings  are  ongoing  for  two  of 
them. 

Slovenia  recently  adopted  new  policies  to 
challenges. 
address 

economy 

circular 

(72)  Eurostat [HSW_N2_02] for NACE Rev. 2 sector E38; 7.14 

fatal accidents p. 100 000 employed in 2018-2020 vs 1.71 
for all sectors in SI; 6.33 in the EU-27 for sector E38 

The industrial system is increasingly circular. 
The efficiency of the economy at using materials, 
is in line with the EU-27 average, with a resource 
productivity of 2.3 purchasing power standard per 

46 

0.0100.0200.0300.0400.0500.0600.0700.0800.00.02.04.06.08.010.012.014.016.018.0201620172018201920202021kg/capitatonnes/capitaMaterial footprint Slovenia (tonnes/capita)Material footprint EU-27 (tonnes/capita)Trade in recyclable raw materials Slovenia (imports extra EU, kg/capita)Trade in recyclable raw materials EU-27 (imports extra EU, kg/capita)4574714865044875110100200300400500600201620172018201920202021Kg per capita Difference waste generated/treatmentLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27 
 
 
          
                                                 
     
 
 
 
EU  average,  some  Natura  2000  sites  still  suffer 
from  techniques  harmful  to  biodiversity  (e.g. 
nutrient  leakage,  mowing  systems  and  timing, 
drainage,  etc.).    After  a  period  of  encouraging 
increase,  Slovenia’s  composting  and  anaerobic 
digestion  per  head  has  decreased  to  only  72  kg 
per  head vs  100  kg  of the  EU  average.  Reversing 
this trend could enhance Slovenia’s circularity and 
strategic autonomy by means of producing organic 
fertilizers and/or biomethane. 

There remains a financing gap in the circular 
including  waste  management.  
economy, 
Additional investments will be required to address 
growing  needs.  The  financing  gap  was  estimated 
at  EUR  132  million  per  year  between  2014  and 
2020.  Over  this  period,  investment  needs  were 
estimated to be at least EUR 244 million per year 
while  investment  baselines  were  EUR  112  million 
per year (see Annex 6). 

kg,  further  increasing  Slovenia’s  resilience  (see 
Annex  5).  Resource  productivity  has  been  on  a 
rising trajectory since 2016. It is key that Slovenia 
keeps this pace to boost repair, reuse and the use 
of secondary raw materials, particularly due to the 
increasing  scarcity  of  raw  materials  and  rising 
prices.  Slovenia  still  ranks  below  the  EU  average 
on  eco-innovation  and  its  industrial  system  could 
benefit  from  more  investments  in  areas  such  as 
eco-design,  repair,  reuse  and  remanufacturing,  as 
well  as  the  uptake  of  new  business  models.  This 
would  help  Slovenia  catch  up  with  the  most 
advanced EU eco-innovation leaders.  

The  built  environment  system  exacerbates 
the  depletion  of  resources  despite  a  very 
high  recovery  rate  of  construction  and 
demolition  waste,  which  reached  97%  in  2020, 
well  above  the  EU  average  (89%).  Soil  sealing 
progressed  between  2015  and  2018  at  a  slower 
rate  than  the  EU  average.  Slovenia  has  included 
measures  to  renovate  buildings  sustainably  and 
improve their use in its RRP, with a focus on public 
buildings  and  increasing  the  share  of  secondary 
raw materials used in construction.   

Slovenia  is  adapting  its  agri-food  system  to 
reduce  its  impact  on  biodiversity.    While  the 
rate of organic farming is slightly higher than the 

Table A9.1: Overall and systemic indicators on circularity 

(1) Persons employed in the circular economy only tracks direct jobs in selected sub-sectors of NACE codes E, C, G and S; (2) the 
circular material use rate measures the share of material recovered and fed back into the economy in overall material use; (3) the 
recovery rate of construction and demolition waste includes waste which is prepared for reuse, recycled or subject to material 
recovery, including through backfilling operations; (4) soil sealing: 2016 column refers to 2015 data; (5) food waste includes 
primary production, processing and manufacturing, retail and distribution, restaurants and food services, and households.  Since 
the share of construction materials is among the higher rates in the EU in terms of the structure of resource consumption, the 
implementation of major construction projects is also expected to slow the growth of resource productivity (IMAD Productivity 
Report 2022) 

Source: Eurostat, European Environment Agency 

47 

AREA201620172018201920202021EU-27 Latest year EU-27Overall state of the circular economyMaterial footprint (tonnes/capita)15.015.116.516.216.9-13.72020YoY growth in persons employed in the circular economy (%)1-3.7 -1.4 -1.5 -3.4 --2.92019Water exploitation index plus (WEI+) (%)0.60.70.60.4--3.62019IndustryResource productivity (purchasing power standard (PPS) per kilogram)1.81.91.82.12.02.32.32021Circular material use rate (%)28.79.810.011.49.911.011.72021Recycling rate (% of municipal waste)55.557.858.959.259.360.049.62021Built environmentRecovery rate from construction and demolition waste (%)398.0-98.0-97.0-89.02020Soil sealing index (base year = 2006)4103.8-105.9---108.32018Agri-foodFood waste (kg per capita)5----68.0-131.02020Composting and digestion (kg per capita)69.073.079.084.070.072.0100.02021 
 
          
 
 
ANNEX 10: DIGITAL TRANSFORMATION 

transformation  by  2030, 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with  the  targets  in  that  Programme  for 
digital 
this  Annex 
describes  Slovenia’s  performance  on  digital  skills, 
digital 
the 
digitalisation  of  businesses  and  public  services. 
Where relevant, it makes reference to progress on 
implementing  the  Recovery  and  Resilience  Plan 
(RRP).  Slovenia  allocates  21%  of  its  total  RRP 
budget to digital (EUR 0.5 billion) (73). 

infrastructure/connectivity 

and 

The  Digital  Decade  Policy  Programme  sets 
out a pathway for Europe’s successful digital 
transformation  by  2030.  The  Programme 
provides  a  framework  for  assessing  the  EU’s  and 
Member States’ digital transformation, notably via 
the  Digital  Economy  and  Society  Index  (DESI).  It 
also  provides  a  way  for  the  EU  and  its  Member 
States  to  work  together,  including  via  multi-
country  projects,  to  accelerate  progress  towards 
the  Digital  Decade  digital  targets  and  general 
objectives (74).  More  generally,  several  aspects  of 
digital  transformation  are  particularly  relevant  in 
the current context. In 2023, the European Year of 
Skills, building the appropriate skillset to make full 
use of the opportunities that digital transformation 
offers  is  a  priority.  A  digitally  skilled  population 
increases the development and adoption of digital 
technologies  and  leads  to  productivity  gains (75). 
Digital  technologies,  infrastructure  and  tools  all 
play  a  role  in  the  fundamental  transformation 
needed to adapt the energy system to the current 
structural challenges (76). 

In  digital  skills,  Slovenia’s  performance  is 
close  to  the  EU  average,  but  the  need  for  a 
digitally  skilled  workforce  remains  a  key 
challenge.  Slovenia  scores  slightly  below  the  EU 

(73)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII of the RRF 
Regulation. 

(74)  The Digital Decade targets as measured by DESI indicators 
and complementary data sources are integrated to the 
extent currently available and/or considered particularly 
relevant in the MS-specific context.  

(75)  See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org). 

(76)  The need and possible actions for a digitalisation of the 
energy system are laid out in the Communication 
‘Digitalisation the energy system – EU action plan’ 
(COM(2022)552. 

average  for  basic  digital  skills  and  female  ICT 
specialists  and  just  above  the  EU  average  on  the 
ICT specialists in employment. It however remains 
far behind innovation leaders in the EU. Moreover,  
78%  of  Slovenian  enterprises  which  recruited  ICT 
finding 
specialists 
sufficiently skilled employees, which is the highest 
percentage in the EU (77). 

difficulties 

reported 

in 

digital 

infrastructure/connectivity, 
In 
Slovenia  shows  a  mixed  performance.  The 
country’s  very  high  capacity  network  (VHCN) 
coverage is slightly above the EU average, but the 
country still faces challenges in rural areas, where 
only  51%  of  the  households  are  covered.  Overall 
5G  coverage  improved  considerably  recently,  but 
still  remains  below  EU  average.  However,  the  5G 
coverage  on  the  3.4-3.8  GHz  spectrum  band, 
essential  for  enabling  advanced  applications 
requiring large spectrum bandwidth, is well above 
the EU average. With its RRP, Slovenia is expected 
to engage considerably in EU-wide collaboration to 
develop  infrastructure  for  advanced  technologies 
by participating in multi-country projects on cloud 
semiconductors, 
infrastructure  and 
blockchain 
communication 
infrastructure.  

services, 
quantum 

and 

Slovenia  scores  well  on  some  areas  related 
to  the  digitalisation  of  businesses,  but 
overall  there  is  room  for  improvement.  The 
country  performs  slightly  below  the  EU  average 
for  SMEs  with  at  least  a  basic  level  of  digital 
intensity and above the EU average for the take up 
of  cloud  services  and  artificial 
intelligence. 
However,  it  is  considerably  below  the  EU  average 
in its use of big data analysis. Moreover, the R&D 
intensity  of  the  Slovenian  ICT  sector  is  below  the 
EU average (78). 

Slovenia performs fairly on the digitalisation 
of  public  services.  It  scores  below  the  EU 
average for digital public services for citizens and 
is  very  close  to  the  EU  average  for  digital  public 
services  for  businesses.  However,  the  access  to 
electronic  health  records  for  citizens  is  above  the 
EU  average  (score  80  out  of  100  vs  71).  A  large 
part  of the digital measures  in the  Slovenian  RRP 
will  be  focused  on  public  services,  including 
measures to support the digital transformation of 

(77)  Source: Eurostat – European Union Survey on ICT Usage and 

eCommerce in Enterprises 

(78)  JRC (2022):  PREDICT Dataset: The EU ICT sector and its R&D 

performance.  

48 

 
 
                                                 
                                                 
 
healthcare and public services, notably to develop 
IT 
user-centric  e-services  and  update 
infrastructure  of 
the  public  administration. 
Moreover, the notification of an electronic identity 
card  under  the  eIDAS  regulation  is  currently 
ongoing.    

the 

Table A10.1: Key Digital Decade targets monitored by DESI indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and 
taken into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.   

Source: Digital Economy and Society Index 

49 

EUDigital Decade target by 2030 DESI 2021DESI 2022DESI 2023DESI 2023(EU)Digital skillsAt least basic digital skillsNA50%50%54%80%% individuals2021202120212030ICT specialists (1)4.4%4.8%4.8%4.5%20 million% individuals in employment aged 15-7420202021202120212030Digital infrastructure/connectivityFixed Very High Capacity Network (VHCN) coverage66%72%76%73%100%% households20202021202220222030Fibre to the Premises (FTTP) coverage (2)66%72%76%56%-% households20202021202220222030Overall 5G coverage0%37%64%81%100%% populated areas202020212022202220305G coverage on the 3.4-3.8 GHz spectrum bandNANA55%41%-% populated areas202220222030Digitalisation of businessesSMEs with at least a basic level of digital intensityNANA67%69%90%% SMEs202220222030Big data (3)7%7%7%14%75%% enterprises20202020202020202030Cloud (3)NA38%38%34%75%% enterprises2021202120212030Artificial Intelligence (3)NA12%12%8%75%% enterprises2021202120212030Digitalisation of public servicesDigital public services for citizensNA697177100Score (0 to 100)2021202220222030Digital public services for businessesNA848384100Score (0 to 100)2021202220222030Access to e-health recordsNANA8071100Score (0 to 100)202320232030Slovenia 
 
  
 
 
 
 
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of  the 
performance of Slovenia’s research and innovation 
system,  which  is  essential  for  delivering  the  twin 
green and digital transition. 

is 

to 

‘moderate 

the  gap  between 

innovation 
a 
Slovenia 
performer’  and 
its 
performance and the EU average is widening. 
Between  2012  and  2019,  Slovenia  witnessed  the 
greatest  decline  in  the  EU  in  terms  of  innovation 
performance, 
the  EU 
in  sharp  contrast 
performance  change,  which  improved  over  the 
same period. While Slovenia’s performance started 
to recover in the following years and continues to 
improve in absolute terms, as shown in the 2022 
edition of the European Innovation Scoreboard (79), 
it is  still  slightly  below the  EU  average (93.5%  of 
the  EU  performance)  and  is  improving  at  a  lower 
rate 
than  most  Member  States’.  The  main 
obstacles  hindering  Slovenia’s  performance  are 
levels  of  venture  capital  and  of  R&D 
low 
expenditure in the public sector. 

envisages a continuous increase in public spending 
on research to 1% of GDP with a view to achieving 
the  1.25%  public  research  and  3.5%  total  R&D 
intensity target set for 2030 (82). The research and 
innovation-related  investments  planned  under  the 
RRP,  worth  EUR 138 million  over  2022–2025,  will 
also help enhance public R&D spending, albeit only 
partially  and 
investments 
temporarily.  These 
mostly  focus  on  digital  innovation  and  research 
and  innovation  (R&I)  for  the  green  transition,  but 
support  is  also  envisaged  for  researcher  mobility 
and demonstration and pilot projects. 

Graph A11.2: Venture capital as % of GDP in 2021 

Graph A11.1: R&D intensity as % of GDP 2010-
2021 

Source: Eurostat, 2021 

the  adoption  of  a 

long-awaited 
With 
structural  R&I  reform,  as  part  of  the  RRP, 
Slovenia  is  taking  steps  to  address  the 
fragmentation  of 
its  R&I  governance 
structure  and  improve  the  performance  of 
the  public  research  system.  Both  the  share  of 
top-cited  publications  (7.7%)  and  the  share  of 
international  co-publications  (54.1%)  among  all 
scientific publications of the country are below the 
EU average (83), which suggests that the Slovenian 
research system is still struggling to produce high-
quality  scientific  output.  Additionally,  the  low 
number 
weak 
commercialisation (84).  To  address  this  challenge, 
the Act  on Research, Development and Innovation 
Activities  introduces  performance-based  funding 
for 
(ROs),  simplifies 
researcher’s mobility and removes barriers that  

research  organisations 

patents 

points 

of 

to 

Source: Eurostat, 2022 

R&D  intensity (80)  reached  2.14%  of  GDP  in 
2021 but is still below its 2013 level and the 
European  average  (2.26%) (81).  While  both 
public and private expenditure on R&D, relative to 
GDP,  bounced  back  in  2017  and  since  then 
continue  to  increase,  R&D  expenditure  is  mainly 
driven  by  business  R&D  spending.  The  Act  on 
Research,  Development  and  Innovation  Activities, 
included in the recovery and resilience plan (RRP), 

(79)  2022 European Innovation Scoreboard, Country profile: 

Slovenia https://ec.europa.eu/assets/rtd/eis/2022/ec_rtd_eis-
country-profile-si.pdf. 

(82)  Resolution on the Slovenian Scientific Research and 

Innovation Strategy 2030 
https://www.gov.si/assets/ministrstva/MIZS/Dokumenti/ZNAN
OST/Nacionalni-dokumenti/Resolution-on-the-Slovenian-
Scientific-Research-and-Innovation-Strategy-2030. 

(80)  Defined as gross domestic expenditure on R&D as a 

(83)  EU averages 9.8% and 55.4% respectively (Source: 

percentage of GDP 

(81)  Source: Eurostat. 

Science-Metrix). 

(84)  1.58 PCT patent applications per billion GDP 

50 

1.822.22.42010201520162017201820192020as % of GDPEUSI0.0000.0500.1000.1500.200EEFIDKNLSEFRHUBEDEATESIELULTCYHRSKPLCZPTELLVBGITROMTSIEU average 
 
   
                                                 
   
                                                 
 
Table A11.1: Key innovation indicators 

(1) EU average for the latest available year with the highest number of country data. 
Source: Eurostat, OECD, DG JRC, Science Metrix (Scopus database and EPO's Patent Statistical database), Invest Europe 

innovation  and  streamlining 

hinder  ROs  from  hiring  researchers  from  outside 
Slovenia.  The  Programme  Committee  will  align 
measures  aimed  at  fostering  academic  research, 
scaling  up 
the 
commercialisation of research results. The Council 
for  Development  of  Slovenia  will  bring  together 
policymakers  and  relevant  R&I  stakeholders  to 
create  an  efficient  monitoring  and  evaluation 
system and to inform the policy-making process. If 
implemented  well,  this  reform  could  significantly 
boost Slovenia’s R&I performance. 

The  lack  of  venture  capital  is  still  hindering 
in 
innovative  start-ups  from  scaling  up 
Slovenia (85).  Venture  capital 
in 
investment 
Slovenia amounts to 0.003% of GDP, which is the 
lowest  value  in  the  EU (86)  (also  see  Annex  12). 
This  especially  affects  high-risk  innovative  small 
and  medium-sized  enterprises  and  can  prompt 

estimates 

them to relocation to scale up (87) The 2021 report 
on  the  state  of  play  of  the  Slovenian  innovation 
ecosystem 
that  Slovenia  needs 
in  venture  capital  annually (88), 
EUR 70 million 
which  is  many  times  the  current  level,  and  the 
current government financing, through the Slovene 
Enterprise  Fund  and  SID  bank,  cannot  close  the 
gap.  The  new  Act  on  Forms  of  Alternative 
the  capital  market 
Investment  Funds  and 
development  strategy,  both  part  of  the  RRP,  may 
help  tackle  the  low  level  of  venture  capital, 
although  a  significant  financial  commitment  will 
be needed to succeed in revitalising the Slovenian 
capital  market.  The  Act  on  Forms  of  Alternative 
Investment Funds entered into force at the end of 
2021 and was linked to the Slovenian authorities’ 
first RRP payment request. 

(85)  Study on the effectiveness of public innovation support for 
SMEs in Europe (2021) demonstrates the positive impact of 
venture capital for high-risk innovative SMEs 
https://europa.eu/!Cc6Ypf. 

(86)  Source: Invest Europe May 2022. 

(87)  Braun et al. (2019), Follow the Money: How Venture Capital 
Facilitates Emigration of Firms and Entrepreneurs in Europe 
2019. https://ssrn.com/abstract=3415370 

(88)  https://www.podjetniski-

portal.si/uploads/gradiva/krepitev_inovacijskega_ekosistema/
srss161_slovenia_ecosystem_d2_state_of_play_report.pdf 

51 

EUaverage (1)R&D intensity (GERD as % of GDP)2.052.202.042.142.142.26Public expenditure on R&D as % of GDP0.660.520.520.560.550.76Business enterprise expenditure on R&D (BERD) as % of GDP1.391.671.511.571.571.49Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 6.267.067.67::9.8PCT patent applications per billion GDP (in PPS)3.121.781.58::3.3Public-private scientific co-publications as % of total publications7.328.648.289.259.437.1Public expenditure on R&D financed by business enterprise (national) as % of GDP0.080.050.04::0.054New graduates in science & engineering per thousand pop. aged 25-3413.5214.6515.2615.17:16.0Total public sector support for BERD as % of GDP0.290.230.25::0.194R&D tax incentives: foregone revenues as % of GDP0.0510.1200.099::0.1Share of environment-related patents in total patent applications filed under PCT (%)9.958.6312.41::13.3Venture capital (market statistics) as % of GDP0.0010.0090.0020.0020.0030.074Employment in fast-growing enterprises in 50% most innovative sectors2.853.205.87::5.52021Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation 2020Slovenia201020152019 
                                                 
                                                 
 
   
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

Slovenia  is  a  small,  open,  and  diversified 
economy  with  one  of  the  highest  rates  of 
trade  integration  for  goods  in  the  Single 
Market. Intra-EU trade represented 67.6% of GDP 
in  2022,  mostly  due  to  this  high  integration  of 
trade  in  goods.  Germany,  Italy,  Austria,  Croatia, 
and  France  are  among  Slovenia’s  main  trading 
partners (89).  This  level  is  an  increase  beyond  the 
level of 2021 (61.4%), which followed a decrease 
to  55.5%  in  2020.  However,  when  it  comes  to 
services, Slovenia scores above the EU average on 
the restrictiveness of services trade.  

The  country’s  economy  is  highly  affected  by 
the  Russian  invasion  of  Ukraine.  Almost  two 
thirds  of  gas  used  in  the  Slovenian  economy  is 
used by industry (see Annex 7), which means that 
price  increases  and  uncertainties  about  future 
supply  are  putting  these  businesses  at  risk  and 
have  led  to  firms  cancelling  shifts,  extending 
holidays, and postponing non-essential production. 
Enterprises  also  report  of  a  decline  in  profits,  a 
decrease in the competitiveness of their products, 
putting  their  long-term  existence  at  risk (90).  High 
inflation  and  energy  prices,  as  well  as  global 
supply  chain  constraints  have  also  particularly 
impacted  industry,  such  as  the  automotive  and 
construction ecosystems as well as aluminium and 
steel and paper companies and the food industry. 
Furthermore,  Slovenian  pharmaceutical,  chemical, 
and electrical companies are exposed, due to high 
export  rates  to  both  Russia  and  Ukraine.  In 
addition,  the  share  of  firms  facing  constraints  in 
terms  of  materials  shortage  has 
increased 
considerably,  which 
is  putting  pressure  on 
companies. 

Following  a  decade  of  slow  productivity 
growth,  productivity  has  returned  to  a 
similar  level  as  before  the  2008  financial 
crisis.  Overall,  labour  productivity  per  person  in 
Slovenia  has  increased  by  2.9%  in  2022.  This  is 
less  than  half  of  the  productivity  gain  of  2021 
(6.8%), which followed after a slump in 2020, but 
above  the  pre-pandemic  level  of  2019 (91).  In 
2022,  Slovenia’s  labour  productivity  stood  at 
85.2%  of  the  EU  aggregate  in  terms  of  GDP  per 
hour  worked,  as  well  as  at  86%  in  terms  of  GDP 
per  persons  employed,  a  similar  level  as  before 

2008 (92).  Nevertheless,  a  rather  low  level  of 
investment,  particularly  from  the  private  sector, 
hampers  productivity  growth  as  well  as  the 
country’s innovation capacity.  

Labour  productivity  in  industry,  which  is 
more  export-oriented, 
is  above  the  EU 
average  and  a  key  driver  of  productivity  in 
the  country  (Graph  A12.1),  despite  a  slight 
decline  in  2022.  Slovenia  is  a  very  industrialised 
country  and  the  share  of  Slovenian  industry  in 
terms  value  added  to  GDP  is  higher  than  the  EU 
average  (28.5%  in  2021  vs  22.8%) (93).  Over  the 
last  few  years,  the  country  achieved  faster 
productivity growth in industry compared with the 
EU  average,  despite  an  already  slightly  lower, 
though  still  relatively  high,  productivity  growth  in 
energy-and  emission 
intensive  manufacturing 
activities in 2021,  impacted by high raw material 
prices (94). The labour shortage in industry, which is 
comparatively  high, presents  a  further  challenge  , 
which  is  exacerbated  by  an  ageing  population. 
There 
ICT 
specialists,  who  are  needed  for  the  digital 
transition of the economy (also see Annex 10). 

is  also  a  particular  shortage  of 

Graph A12.1: Labour productivity in industry 

Source: Eurostat, NAMA_10_LP_A21  

Despite  action  being  taken  to  improve  the 
business  environment,  challenges  remain. 
Slovenia  has  taken  several  measures  in  recent 
years  to  improve  the  ease  of  doing  business  and 
reduce  the  administrative  burden,  for  instance 
making  changes  to  insolvency  legislation  as  well 
as  establishing  a  one-stop-shop/  single  point  of 
contact  system  for  businesses  and  to  attract 
investments.  While  the  obstacles  to  companies 
remain rather high and are related to, for instance, 

(89)  Statistical Office and Business Slovenia 

(92)  AMECO database, European Commission 

(90)  Chamber of Commerce and Industry of Slovenia 

(93)  World Bank - Industry, value added (% of GDP)  

(91)  Eurostat, real labour productivity per person 

(94)  IMAD Productivity Report 2022 

52 

80.00085.00090.00095.000100.000105.000110.000115.000120.0002013201420152016201720182019202020212022European Union - 27 countries (from 2020) Industry (except construction)Slovenia Industry (except construction) 
 
                                                 
 
   
                                                 
 
the  efficiency  of  state  institutions,  excessive  red 
tape,  and  lengthy  procedures (95),  the  Slovenian 
recovery  and  resilience  plan  (RRP)  also  aims  to 
address such challenges through, for instance, two 
Debureaucratisation Acts, with the aim of reducing 
and  digitalising  administrative  procedures.  The 
first  of  these  acts  entered  into  force  in  January 
2022.  Related  to  this,  while  access  to  finance 
remains  a  challenge  for  companies,  particularly 
SMEs, Slovenia is also taking action to improve in 
this  area,  for  instance  through  its  Alternative 
Investment  Funds  Act  or  its  Capital  Markets 
Development Strategy.  

With  an  underdeveloped  equity  market, 
financing  is  heavily  skewed  towards  loans. 
While access to loans is above the EU average and 
increased  in  2021,  in  comparison  with  2020, 
Slovenia  remains  among 
the  eight  weakest 
performers when it comes to access to equity. This 
is  despite  a  modest  improvement  from  2020,  as 
measured by the equity composite indicator in the 
index (96).  Furthermore, 
EIF  access  to  finance 
Slovenia  has  a  very  low  ratio  of  venture  capital 
investment  to  GDP,  which  affects  companies’ 
innovation  capacity  (also  see  Annex  11).  Policy 
action  in  this  area  will  also  benefit  SMEs  during 
their  scale-up  stage.  The  share  of  SMEs  in  the 
economy is higher than the EU average in terms of 
employment  (73.2%  compared  to  64.4%)  and 
value  added  (65.6%  compared  to  51.8%) (97). 
Based on data from previous years, domestically-
oriented  SMEs  generally  have  lower  productivity 
than  export-oriented  companies (98).  When 
it 
comes to investment, a lower share of firms than 
investment 
the  EU  average  are 
obstacles.  In  2022,  this  share  was  on  a  similar 
level  as  in  2021,  an  increase  compared  to  2020 
but below the 2019 level (99).  

reporting 

The  share  of  SMEs  reporting  late  payments 
has  surpassed  the  EU  average,  as  late 
payments  continue  to  be  an  issue,  most 
notably for SMEs. They have negative effects on 
the resilience and growth prospects of businesses 
and  are  significantly  above  the  pre-pandemic 
In  addition,  the  share  of  companies 
levels. 

(95)  IMAD Development Report 2022 

(96)  EIF SME Access to Finance Index 

(97)  SME Performance Review 2021/2022 

(98)  OECD Economic Surveys: Slovenia 2022 

identifying  supply  chain  disruptions  as  one  of  the 
main  challenges  impacting  customers’  ability  to 
pay on time and in full is considerably higher than 
the  EU  average (71%  and  57%,  respectively) (100). 
While on or slightly below the EU average when it 
comes to payment gaps (i.e. the gap between the 
agreed and actual payment time), both the private 
sector/business-to-business  and  the  public  sector 
payment gap widened in comparison to 2021. The 
private sector gap widened by one day, from 12 to 
13,  which  is  lower  than  in  2020  but  significantly 
higher than in 2018 and 2019. For payments from 
the public sector, this gap widened by two days  – 
from 11 to 13 days, which is slightly below the EU 
average  but  significantly  wider  than  the  pre-
pandemic gaps.  

Another  aspect  related  to  the  business 
environment,  which  may  be  hampering 
investment, market entry and competition in 
some  sectors,  is  the  role  of  state-owned 
enterprises (SOEs). Despite improvements in the 
profitability  of  these  companies,  a  lack  of  good 
corporate  governance  in  individual  SOEs  may 
negatively impact on competitiveness and increase 
inefficiency (17).  The  Slovenian  state  continues  to 
maintain a stake in non-strategic sectors, and has, 
for  instance,  recently  increased  its  stake  in  the 
tourism sector (98).  

for 

important 

Particularly 
the  energy 
transition,  decarbonisation,  and  for  ensuring 
energy security in the country is the tackling 
of  process-related  barriers  related  to  the 
deployment  of renewables.  Slovenia’s  share  of 
in  its  energy  mix 
renewable  energy  sources 
remains comparatively small (see Annex 6) and its 
installed  renewable  electricity  capacity  was  below 
the  EU  average  in  2020.  These  process-related 
barriers,  as  reviewed  by  the  Single  Market 
Enforcement  Taskforce  (SMET),  concern  lengthy 
understaffed 
permitting 
authorities  and  Slovenia  has 
implemented 
measures to address these issues.  

procedures 

and 

Furthermore,  barriers  also  remain  in  other 
areas  impacting  the  business  environment, 
for  instance  in  professional  services.  In  the 
past,  Slovenia  reduced  the  number  of  regulated 
professions  to  some  extent,  particularly  in  the 
crafts  sector,  but  regulatory  restrictiveness  is 
higher  than  the  EU  average  for  professions  such 

(99)  EIB Investment Survey 2022 

(100) INTRUM European Payment Report 

53 

 
                                                 
                                                 
increase cost effectiveness and professionalisation 
and  lead  to  a  further  reduction  of  the  share  of 
negotiated  procedures  without  prior  publication.  

a 

recorded 

considerable 
Slovenia 
improvement  of  its  transposition  deficit  in 
2021.  With  more  room  for  improvement  in  the 
timely  transposition  of  directives,  the  country’s 
transposition deficit has dropped to 1.2%, which is 
below  the  EU  average,  and  which  puts  it  back  on 
track to reach the target of 0.5% proposed in the 
infringements, 
Single  Market  Act.  Regarding 
Slovenia  remains  below  the  EU  average  on  the 
number  of  cases.  While  Slovenia’s  SOLVIT 
resolution  rate  decreased  from  90%  in  2020  to 
80% in 2021, which is below the EU average, the 
caseload  remains  small,  the  handling  time  good 
overall,  and  the  staffing  level  can  be  seen  as 
sufficient  (103). 

Graph A12.2: Business environment and 
productivity drivers 

Source: 1) % of GDP, 2021 Eurostat;  
2) composite indicator, 2021 European Investment Fund 
access to finance index;  
3) average payment delay in number of days, 2022 Intrum;  
4) % of firms in manufacturing facing constraints, 2022 
European Commission business consumer survey;  
5) proportion of contracts awarded with a single bidder, 2022 
Single Market Scoreboard. 

as  real  estate  agents,  lawyers,  civil  engineers, 
tourist  guides (101).  Reducing 
architects,  and 
regulatory  barriers  in  the  professional  services 
sector  will make  entry  easier  and improve  quality 
and  prices,  an  aspect  which  is  not  covered  in  the 
RRP.   The  fragmented  system  regulating  civil 
engineers  could  hinder  the  free  movement  of 
spreading 
and 
professionals 
of 
over  different 
responsibility 
professionals  in  the  same  area  of  activity  could 
impact  on  the  proportionality  and  efficiency  of 
service provision. In addition, the diverging regional 
regulations  governing  tourist  guides  seem  to 
hinder market access and affect both national and 
cross-border service providers. 

categories 

rules 

the 

Competition  in  public  procurement  remains 
an issue. In 2020, 2021 and 2022, Slovenia had 
the  second  highest  share  of  contracts  awarded 
where  there  was  just  a  single  bidder  (51%  in 
2022, also see Graph A12.2). In addition, one fifth 
of all procedures are unsuccessful due to no offers 
having  been  submitted (102).  Recent  data  show 
some improvement on the use of less transparent 
procedures.  The  country  used  to  have  one  of  the 
highest  shares  of  negotiated  procedures  without 
prior publication. This share was, however, reduced 
to  11%  in  2022,  from  19%  in  2021  and  26%  in 
2020 (103).  

To  address  these  challenges,  Slovenia  has 
started  to  implement  several  RRP  measures 
to  increase  competition,  digitalisation  and 
professionalisation  among  public  officials.  
The  implementation  of  reforms  to  improve  the 
including 
efficiency  of  public  procurement, 
measures  to 
lower  the  share  of  negotiated 
procedures  without  prior  publication,  is  ongoing. 
The  development  of  the  planning  process  and 
thorough  preparation  of  public  procurement 
procedures  could  further  contribute  to  a  more 
competitive  environment  and  reduce  the  number 
of  contracts  awarded  on  the  basis  of  the  lowest 
price.  Moreover,  greater  interoperability  of  e-
procurement 
decrease 
administrative  burdens  and  improve  accessibility 
to  the  public  procurement  market.  In  addition,  an 
aggregation  of  demand  techniques  can  also 

platforms 

will 

(101) Communication on updating the reform recommendations 
for regulation in professional services, COM(2021)385 

(102) Commission calculations, based on Tenders Electronic Daily 

(TED) 

(103) European Commission Single Market Scoreboard 

54 

1) Businessinvestments2) EIF access tofinance index3) Payment gap- G2B3) Payment gap- B2B4) Materialshortage4) Labourshortage5) Single bidsEuropean UnionSlovenia 
                                                 
 
   
 
Table A12.1: Industry and Single Market 

(*) Last available year  
Source: (1) AMECO, (2) Eurostat, (3) ECFIN BCS, (4) Eurostat, (5) COMEXT and Commission calculations, (6) Eurostat, (7) Eurostat, 
(8) OECD, (9) Single Market Scoreboard, (10) EIB survey, (11) Eurostat: (12) Intrum, (13) SAFE Survey, (14) EIF SME Access to 
Finance Index. 

55 

POLICY AREAINDICATOR NAME20182019202020212022EU27 average (*)Net private investment, level of private capital stock, net of depreciation, % GDP (1)-0.50-200.93.7Net public investment, level of public capital stock, net of depreciation, % GDP (1)1.11.31.32.12.60.4Real labour productivity per person in industry (% yoy)(2)-14.4-2.17.6-1.51.4Cost competitive-nessNominal unit labour cost in industry (% yoy)(2)4.4-0.14.3-0.27.82.9Material shortage (industry), firms facing constraints, % (3)151011293847Labour shortage using survey data (industry), firms facing constraints, % (3)393720324128Vacancy rate (business economy)(4)32.723.23.63.1Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials (5)0.170.170.170.160.150.18Installed renewables electricity capacity, % of total electricity produced (6)36.536.536.536n.a.50.9Single Market integrationEU trade integration, % (7)62.161.055.661.467.645.8RestrictionsEEA Services Trade Restrictiveness Index (8)0.060.060.060.060.060.05Public procurement Single bids, % of total contractors (9)n.a.n.a.46445129Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle (10)12.721.413.916.416.129.6Bankruptcies, Index (2015=100)(11)124.7116.3102.792.785.286.8Business registrations, Index (2015=100) (11)103.5105.495.1108.2115.4121.2Payment gap - corporates B2B, difference in days between offered and actual payment (12)4817121313Payment gap - public sector, difference in days between offered and actual payment (12)7119111315Share of SMEs experiencing late payments in past 6 months, % (13)n.a.38.849.241.249.743EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1 (14)0.820.790.440.62n.a.0.46EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 1 (14)0.180.080.050.1n.a.0.23BUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to financeHEADLINE INDICATORSEconomic StructureRESILIENCEShortagesStrategic dependenciesSINGLE MARKET 
 
 
 
   
 
ANNEX 13: PUBLIC ADMINISTRATION 

This  Annex  outlines  the  performance  of 
Slovenia’s  public  administration,  which  is 
essential for providing services and carrying 
out  reforms.  The  effectiveness  of  the  public 
administration  in  Slovenia  is  above  the  EU-27 
average (104).  The  government  has  appointed  a 
council (105) 
to  make  proposals  on  better 
regulation,  public  participation  in  policy-  and  law-
reorganisation  of  administrative 
making, 
districts  for  better  quality  public  services  and  the 
digitalisation  of  administrative  procedures  and 
processes.  

the 

Slovenia’s  civil  service  continues  to  face 
challenges  due  to  difficulties  in  attracting 
and  retaining  a  young  workforce.  The  salary 
system is one of the factors that discourage young 
people  from  entering  the  civil  service (106).  The 
decline in the share of young civil servants is also 
due to the austerity policy after the financial crisis 
of not replacing retired staff. There are issues with 
the recruitment and remuneration of IT specialists. 
In  addition,  recruitment  to  top  civil  service 
positions  continues  to  attract  few  candidates.  In 
2021, a single application was received in 41.4  % 
of  cases (107).  The  recovery  and  resilience  plan 
includes  a  reform  of  the  public  wage  system 
to  work 
aimed 
performance 
differentiated 
remunerations across sectors. Further changes are 
under  way 
resource 
management  for  civil  servants  such  as  the  Civil 
Service Act. 

remuneration 
ensuring 

to  digitalise  human 

linking 
and 

at 

are  not  proactive  in  making  information  available 
on  their  performance.  The  digital  public  services 
strategy (109)  sets  the target  that  by  2030  all  key 
public  services  will  be  provided  online  and 
accessible  to  all  users.  To  strengthen  data 
management in the public sector, Slovenia plans to 
establish  a  network  of  data  stewards.  A 
coordinating body for the digital transformation of 
the  public  administration  was  established  under 
the recovery and resilience plan (110). 

their 

implementation 

Slovenia  is  making  efforts  to  improve  the 
quality  of  its  legislation.    The  use  of  ex  post 
evaluation is well below the EU-27 average (Graph 
A13.1).  Stakeholder  consultations  are  mandatory, 
and 
is  supported  by 
guidelines.  However,  minimum  recommendations 
for consultations are often ignored in practice, e.g. 
the deadline for public input  is not indicated or is 
too  short,  or  the  documents  are  not  made 
public (111). Based on the action plan on improving 
the  quality  of  law-making,  Slovenia  began  a 
project  on  the  digitalisation  of  the  legislative 
process  and 
consultations  on  a 
methodology  for  regulatory  impact  assessments. 
Slovenia 
reducing 
to 
administrative burdens. The Stop Bureaucracy (112) 
portal 
citizens  and  businesses  make 
suggestions  on  how  to  cut  red  tape  and  monitor 
implementation.  The  law  on  de-bureaucratisation 
adopted  under  the  recovery  and  resilience  plan 
aims  to  reduce  the  administrative  and  regulatory 
burden on citizens and businesses and improve the 
efficiency of the public administration. 

focus  on 

continues 

launched 

lets 

Slovenia  is  not  fully  capitalising  on  the 
opportunities  of  e-government.  Based  on 
analysis  of  life  events,  Slovenia  ranks  below  the 
EU-27  average 
in  the  overall  e-government 
maturity  indicator  (Table  A13.1).  Slovenia  ranks 
well  on  open  data,  taking  first  place  in  the  fast-
track  group  and  maintaining  8th  place  overall. 
However,  a  2021  analysis (108)  showed  that 
Slovenian  municipalities  do  not  perform  well  in 
openness and transparency, as most municipalities 

justice  system  performs  efficiently 
The 
overall, (113) but challenges remain in court cases 
for  economic  and  financial  crimes.  The  average 
length  of  proceedings  at  first  instance  increased 
from  21  months  (in  2020)  to  around  2  years  in 
large value, and from 15 months (in  2020)  to 16 
months  in  small  value  litigious  civil  cases.  The 
length  of  time  of  litigious  commercial  cases 
stagnated  at  11  months.  Appeal  cases  were 

(104) Worldwide Governance Indicators, 2021.  

(105) Expert Council on the Sustainable Development of Public 

Administration.    

(106) Virant, G. and Rakar, I., ‘Implementing a government-wide 

unified and transparent salary system in Slovenia’, NISPAcee 
Journal of Public Administration and Policy, Vol. 11, No 1, 
2018, pp. 183-206, DOI: 10.2478/nispa-2018-0008. 

(107) Civil Servants’ Council, 2021 Annual Report.   

(108) https://danesjenovdan.si/lestvica-transparentnosti/   

(109) Digital Public Services Strategy 2030.  

(110) The decree on the Council for the Development of 

Informatics was published in the official gazette on 25 
February 2022.  

(111) National NGO information centre (CNVOS) reports  

(112) https://www.stopbirokraciji.gov.si  

(113) For a more detailed analysis of the performance of the 
justice system in Slovenia, see the 2023 EU Justice 
Scoreboard (forthcoming) and the country chapter for 
Slovenia in the 2023 Rule of Law Report (forthcoming) 

56 

 
 
                                                 
                                                 
 
Table A13.1: Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2022 value. If not available, the 2021 value is shown. 
(3) Measures the user centricity and transparency of digital public services as well as the existence of key enablers for the 
provision of those services. (4) Defined as the absolute value of the difference between the percentage of men and women in 
senior civil service positions. Flags: (b) break in time series; (d) definition differs; (u) low reliability. 
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Labour Force 
Survey, Eurostat (# 4, 5, 7), European Institute for Gender Equality (# 6); Fiscal Governance Database (# 8, 9); OECD Indicators of 
Regulatory Policy and Governance (# 10). 

resolved  more  quickly  taking  on  average  around 
1.8 months in civil (2.4 in 2020) and 2.7 months in 
commercial  cases  (3.4  in  2020).  No  systemic 
deficiencies  have  been 
judicial 
independence.   The  quality  of  the  justice  system 
has  been  continuously  improving.  The  use  of 
information  and  communication  technologies  to 

reported  on 

manage cases is advanced, particularly in courts.  

Electronic  communication  between  courts  and 
parties  has  progressed, 
in  criminal 
justice, where there is still room for improvement. 

including 

Graph A13.1: Slovenia. a) Regulatory impact assessment, b) Stakeholder engagement and c) Ex post 
evaluation of legislation 

Source: Indicators of Regulatory Policy and Governance Surveys 2017 and 2021, (http://oe.cd/ireg). 

57 

SI201720182019202020212022EU-27(2)162.266.663.276.776.8n/a64.82n/an/an/a69.166.668.772.93n/a0.70.70.80.90.90.8462.762.968.071.873.4 (b)75.452.0518.918.817.89.928.3 (b)32.716.9614.012.214.814.614.220.211.072.21.71.81.71.5 (b)1.41.580.70.70.70.80.8n/a0.790.40.40.40.40.4n/a1.5101.53n/an/an/a1.52n/a1.7Medium term budgetary framework indexIndicator (1)E-government and open government dataShare of individuals who used the internet within the last year to interact with public authorities (%)E-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with tertiary education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance0.000.501.001.502.002.503.0000.511.522.53SI2017SI2021SI2017SI2021Primary lawsSecondary lawsb) Stakeholder engagement MethodologyOversightSystematic adoptionTransparencyEU-270.000.501.001.502.002.503.0000.511.522.53SI2017SI2021SI2017SI2021Primary lawsSecondary lawsc) Ex-postevaluation of legislationMethodologyOversightSystematic adoptionTransparencyEU-270.000.501.001.502.002.503.0000.511.522.53SI2017SI2021SI2017SI2021Primary lawsSecondary lawsa) Regulatory impact assessmentMethodologyOversightSystematic adoptionTransparencyEU-27 
 
  
 
  
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU. This Annex provides an overview of Slovenia’s 
progress in implementing the Pillar’s 20 principles 
and EU headline and national targets for 2030 on 
employment, skills and poverty reduction. 

Table A14.1: Social Scoreboard for Slovenia 

Update of 27 April 2023. Members States are classified on 
the Social Scoreboard according to a statistical methodology 
agreed with the EMCO and SPC Committees. It looks jointly at 
levels and changes of the indicators in comparison with the 
respective EU averages and classifies Member States in seven 
categories. For methodological details, please consult the 
Joint Employment Report 2023. Due to changes in the 
definition of the individuals' level of digital skills in 2021, 
exceptionally only levels are used in the assessment of this 
indicator; NEET: neither in employment nor in education and 
training; GDHI: gross disposable household income. 
Source: Eurostat. 

Despite  the  current  unstable  economic 
environment,  the  labour  market  in  Slovenia 
remains 
robust  as  shown  by  growing 
employment  and  low  unemployment  rates. 
The employment rate recovered to 77.9% in 2022, 
well  above 
(74.6%).  The 
the  EU  average 
unemployment  rate  further  declined  to  4.0%  in 
2022, well below the EU average of 6.2%. Despite 

in 

its 

the positive trend, Slovenia continues to face some 
long-term  structural  challenges 
labour 
market.  One  of  these  challenges  is  the  low 
employment and activity rates of older workers, in 
particular  those  with  lower  skills  levels,  and 
persons  with  disabilities.  These  groups  also  face 
persisting high long-term unemployment. In 2022, 
40.7%  of  young  people  were  in  precarious  forms 
of  work  (i.e.  fixed-term  contracts  or  temporary 
agency work). This rate was significantly above the 
EU average (35.9%) and also higher than for other 
age  groups.  The  overall  share  of  those 
in 
precarious  forms  of  work  is  also  relatively  high 
(1.4%  in  2022  vs  1.6%  in  the  EU).  Slovenia’s 
recovery  and  resilience  plan 
(RRP)  sets  out 
measures to: (i)  improve  cooperation between the 
education  system  and  companies;  (ii)  help  young 
people  enter  the  labour  market  faster;  (iii)  adapt 
the  workplace  to  the  needs  of  persons  with 
disabilities; and (iv) support more flexible forms of 
work  to  encourage  older  people  to  work  longer. 
Slovenia  will  also  use  the  European  Social  Fund 
Plus  (ESF+)  to  support  active  labour  market 
measures,  in  particular  for  young  people  and 
vulnerable  groups,  such  as 
long-term 
unemployed.  Addressing  these  challenges  would 
support 
national 
employment rate target of 79.5% by 2030. 

progress 

towards 

the 

the 

by 

In  particular,  more 

shortages,  worsened 

skill 
Labour 
mismatches, have become acute. After peaking 
in  the  first  half  of  2022,  the  vacancy  rate  in 
Slovenia  was  below  the  EU  average  of  2.8%  at 
2.5% in Q4-2022, however, remained significantly 
elevated. 
than  half  of 
employers  reported  shortages  of  staff  in  health 
and  long-term  care,  ICT,  construction,  transport, 
accommodation  and  hospitality  services,  and 
education  in  2022.  Unfavourable  demographic 
developments  are  expected  to  exacerbate  issues 
as  the  supply  of  labour  will  not  keep  up  with 
demand  despite  the  estimated  future  higher 
participation  of  older  workers  and  young  people. 
Furthermore,  lengthy  administrative  procedures 
hinder  employing  more  foreign  workers (114).  The 
share of individuals who have basic or above basic 
overall digital skills was 50% in 2021 (EU: 53.9%). 
To  address 
these  challenges,  Slovenia  has 
conceived  a  mix  of  reforms  and  measures  to  be 
supported  under  its  RRP  and  the  ESF+.  Labour 

(114) IMAD Development Report, 17 August 2022. 

58 

4.149.678.56.93.2477.941.7119.2913.21144.8121.14.147.54.8Critical situationTo watchWeak but improvingGood but to monitorOn averageBetter than averageBest performersPolicy areaHeadline indicatorDynamic labour markets and fair working conditionsEmployment rate(% of population aged 20-64, 2022)Unemployment rate(% of active population aged 15-74, 2022)Long term unemployment(% of active population aged 15-74, 2022)GDHI per capita growth                                                              (2008=100, 2021)Social protection and inclusionAt risk of poverty or social exclusion rate                                            (% of total population, 2021)At risk of poverty or social exclusion rate for children                       (% of population aged 0-17, 2021)Impact of social transfers (other than pensions) on poverty reduction (% reduction of AROP, 2021)Disability employment gap(percentage points, 2021)Housing cost overburden(% of total population, 2021)Children aged less than 3 years in formal childcare(% of population under 3-years-old, 2021)Self-reported unmet need for medical care(% of population 16+, 2021)Equal opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24, 2022)Share of individuals who have basic or above basic overall digital skills (% of population aged 16-74, 2021)Youth NEET rate(% of population aged 15-29, 2022)Gender employment gap(percentage points, 2022)Income quintile ratio(S80/S20, 2021) 
 
 
 
  
 
                                                 
 
market institutions and their services are set to be 
modernised to better coordinate labour supply and 
demand,  anticipate 
skill  needs,  and  ease 
transitions  and  mobility.  Other  measures  will 
improve  the  quality  of  the  working  environment 
and  working  conditions.  The  RRP  provides  for 
pension  and  unemployment  insurance  reforms  to 
promote  longer  working  lives  and  reduce  the  gap 
between  the  labour  market  exit  age  and  the 
statutory retirement age. 

Table A14.2: Situation of Slovenia on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, adults in learning in the past 12 
months 
(2) Number of persons at risk of poverty or social exclusion 
(AROPE), reference year 2019 
Source: Eurostat, DG EMPL 

The  education  and  training  system 
is 
performing  well,  but  Slovenia  still  faces 
challenges.  The share of children participating in 
early  childhood  education  and  care  has  increased 
significantly  since  2015  (see  Annex  15),  including 
the  rate  of  children  aged  less  than  3  years  in 
formal  childcare.  Slovenia  has  one  of  the  lowest 
rates of early school leavers and tertiary education 
attainment  is  high,  but  significant  differences 
between  men  and  women  and  between  native-
born and foreign-born people persist for the latter 
(see  Annex  15).  Despite  a  low  share  of  young 
people  not  in  education,  employment  or  training 
(NEET)  (8.5%  vs  11.7%  in  the  EU  in  2022),  some 
socio-economic  groups  such  as  Roma  and 
immigrants  are  disproportionately  represented. 
Moreover,  the  long-standing  shortage  of  teachers 
in  Slovenia  is  expected  to  intensify  in  the  future; 
especially  in  the  science,  technology,  engineering 
and  mathematics  (STEM)  subjects  and  due  to  the 
low number of new entrants in the profession (see 
Annex 15). Adult participation in learning (over the 
past  4  weeks)  stood  at  21.6% 
in  2022, 
significantly  above  the  EU  average  of  11.9%. 
Despite  this  positive  situation,  adult  participation 
in  learning  remained  low  among  older  and  low-
skilled people (4.7%, EU average: 5.9%). The ESF+ 
promotes  lifelong  learning  and  flexible  upskilling 
and  reskilling  opportunities  for  all,  with  an 

(see  Annex  15). 

emphasis  on  digital  skills.  Other  EU  funding 
supports efforts to improve educational outcomes 
of  students  with  migrant  or  disadvantaged 
backgrounds 
Improving  the 
outreach  to  low-skilled  and  older  workers  could 
help  Slovenia  contribute  to  reaching  the  national 
target  of  having  at  least  60%  of  all  adults 
participating  in  education  and  training  every  year 
by 2030. 

in  2021 

Slovenia has a relatively low share of people 
at  risk  of  poverty  or  social  exclusion 
(AROPE),  but  there  are  still  challenges  for 
certain  groups.  The  overall  share  of  the  AROPE 
population  stood  at  13.2% 
(1.1 
percentage  points  lower  than  in  2020),  far  below 
the  EU  average  of  21.7%.  However,  for  people 
aged 65 and over, this share was closer to the EU 
average  (18.1%  vs  19.5%),  down  from  above-
average  rates  in  2020  for  men  and  women. 
Unemployed,  inactive,  and  self-employed  people, 
retirees  and  foreign-born  people  are  also  at  a 
higher risk of poverty and social exclusion, as well 
as  single-person  households.  In  2021,  Slovenia 
had  the  lowest  level  of  income  inequality  among 
all EU countries (115), but 11.7% of the population 
still lived below the poverty threshold. The current 
period of high inflation may further deteriorate the 
situation in terms of purchasing power of low- and 
income  households.  Overall,  housing 
middle- 
deprivation 
is  higher  than  the  EU  average. 
Slovenia’s  RRP  aims  to  improve  access  to  non-
profit  rental  housing  for  young  families,  socially 
deprived  individuals  and  marginalised  groups.  In 
combination  with  the  ESF+,  further  social  policy 
action  would  allow  Slovenia  to  contribute  to 
reaching  the  national  target  of  having  at  least 
9 000 fewer people at risk of poverty by 2030. 

care 

long-term 

Since  the  COVID-19  pandemic,  access  to 
quality 
further 
deteriorated.  The  main  reasons  are  poorly 
developed  formal  home  care,  a  lack  of  facilities 
and staff in residential care homes and no proper 
policy/strategy  on  community  and  home-based 
care.  

has 

(115) The low income inequality in Slovenia is mainly due to 

progressive taxation and, to some extent, social transfers. 
(IMAD Development report 2022). 

59 

IndicatorsLatest dataTrend            (2015-2022)National target by 2030EU target by 203077.9(2022)40.3(2016)-4(2021)Adult learning1 (%)6060Employment (%)79.578Poverty reduction2 (thousands)-9-15 000 
 
   
 
                                                 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  for 
Slovenia’s  education  and  training  system  in  light 
of  the  EU-level  targets  and  other  contextual 
indicators  under  the  European  Education  Area 
strategic framework, based on the 2022 Education 
and Training Monitor. 

students  in  the  fields  of  science  and  technology 
and  special  needs  education,  or  making  available 
systemic  traineeships  for  teaching  staff,  seek  to 
support  new  entrants  in  the  profession.  Salary 
negotiations  between  the  government  and  trade 
unions are also ongoing in early 2023. 

as: 

its 

such 

kindergarten 

the  quality  of 

increasing  challenges  to 
Slovenia  faces 
teaching 
maintain 
workforce.  Teacher  shortages  present  an  acute 
challenge in several subject  areas and specialised 
domains, 
teachers, 
classroom  and  subject  teachers  in  primary  and 
secondary  schools,  especially  in  the  fields  of 
science, technology, engineering and mathematics 
(STEM); 
subjects; 
teachers  of  professional 
professionals  working  with  children  with  special 
needs;  and  in  support  occupations  (pedagogues, 
psychologists,  etc.) (116).  The  age  distribution  of 
teachers  in  primary  and  secondary  education  has 
been  stable  since  2016:  more  than  one  third  of 
teachers  are  aged  50  and  above.  By  2030, 
between 39% (117) and 56% (118) of STEM teachers 
in  lower  secondary  education  are  estimated  to 
retire.  Their  replacement  will  require  a  larger 
number of new entrants than the current supply of 
graduates  in  these  disciplines,  notwithstanding 
decreasing  demographic  cohorts.  However, 
in 
2020,  the  percentage  of  young  teachers  (under 
25)  was  well  below  the  EU  average  (0.5%  vs. 
1.2%),  and  the  number  of  graduates  in  STEM 
teacher  training  programmes  is  plummeting (119). 
The weakened social status of the profession and 
uncompetitive  salaries  deter  graduates  from 
entering  teaching  careers.  According  to  the  OECD 
TALIS  survey  (2018),  only  6%  of  teachers  in 
Slovenia  perceive  that  their  work  is  valued  by 
society,  the  second  lowest  rating  in  the  EU. 
Initiatives  such  as  scholarships  for  pedagogical 

Participation  in  early  childhood  education 
and  care  (ECEC)  is  steadily  increasing.  In 
2021, 92.6% of children between the age of 3 and 
compulsory  school  age  attended  kindergartens, 
close  to  the  EU  average  of  93%.  Government 
policies,  such  as  child  subsidies;  targeted  support 
for  vulnerable  children  in  the  form  of  short 
programmes;  and  the  modernisation  of  ECEC 
curricula, contribute to these positive trends. 

its 

growing 

Young  people  perform  well  in  basic  and 
digital  skills,  although  educational  outcomes 
vary  by  school  type,  immigrant  background 
and  gender.  The  selectivity  of  the  school  system 
at  age  15  contributes  to  performance  gaps 
observed between schools in PISA (Programme for 
International  Student  Assessment)  test  results: 
well-performing  students  tend  to  be  streamed  in 
general  secondary  education  (gymnasia),  while 
despite 
vocational 
education and training attracts pupils with weaker 
results.  Among  15-year-olds,  the  gender  gap  in 
reading has narrowed over the past decade. While 
newly  arrived  migrant  children  are  twice  more 
likely to be underachievers in reading compared to 
their  native-born  peers,  native-born  pupils  with 
immigrant  parents 
fare  significantly  better. 
Slovenia  has  reinforced  language  support  for 
migrant pupils to facilitate their inclusion. The rate 
of early leavers from education and training is one 
of  the  lowest  in  the  EU,  at  4.1%,  well  below  the 
EU-level target of 9%. 

popularity, 

(116) Employment Service of Slovenia (2022) Teachers and 

Professionals in Primary and Secondary Schools; Employment 
Service of Slovenia (2022): Occupation Barometer. 

(117) Ministry of Education, KPIS evidence (2022), share of lower 
secondary teachers aged 50 and above, in the fields of 
biology, physics, chemistry, mathematics, natural science, 
technics and technology, aggregated. 

(118) Dolenc, K., Šorgo, A., & Virtič, M. P. (2021). Signs of a 

Catastrophe: Predicted Shortage of Teachers of Lower 
Secondary Science and Technics and Technology in Slovenia. 
Journal of Elementary Education, 14(2), 239-256. 

(119) Dolenc, K., Šorgo, A., & Virtič, M. P. (2021). Signs of a 

Catastrophe: Predicted Shortage of Teachers of Lower 
Secondary Science and Technics and Technology in Slovenia. 
Journal of Elementary Education, 14(2), 239-256. 

60 

Slovenia is implementing reforms to support 
the  green  and  digital  transformations  in 
education.  Slovenian  schools  are  generally  well 
equipped  and  connected,  but  there  is  no  centrally 
available  data  on  the  distribution  of  equipment, 
hindering targeted support for schools in need. The 
COVID-19  pandemic 
in 
teachers’ digital skills, and while young Slovenians 
fare  around  the  EU  average  in  digital  skills,  there 
is 
ICT 
professionals (see  Annex  10).  Under  its  national 
recovery and resilience plan, Slovenia aims to train 
20 000  education  professionals  and  managers  – 
close to half of the teaching population – in digital 
and  green  skills,  and  in  skills  for  environmental 

revealed  deficiencies 

shortage 

trained 

highly 

of 

a 

 
 
                                                 
 
 
Table A15.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Source: (1.3,4.5,7.8,9.10,11) = Eurostat; 2 = OECD (PISA); 6 = European Commission (Joint Research Centre). Notes: Data is not 
yet available for the remaining EU-level targets under the European Education Area strategic framework, covering 
underachievement in digital skills and participation of adults in learning. The equity indicator shows the gap in the share of 
underachievement in reading, mathematics and science (combined) among 15-year-olds between the lowest and highest quarters 
of socio-economic status. 

Tertiary  education  attainment  is  high,  but 
there  is  a  significant  gender  gap.  In  2022, 
tertiary  education  attainment  of  young  people 
aged  25-35  reached  47.3%,  surpassing  the  EU 
target  of  45%.  However,  the  attainment  rate 
among  women  (60.2%)  almost  doubles  the  rate 
among  men 
(36.4%),  while  female  students 
remain  under-represented  in  ICT  programmes.  In 
its  national  programme  of  higher  education  up  to 
the 
2030, 
transformation  and 
its 
higher  education  system.  With  support  from  the 
Recovery  and  Resilience  Facility,  Slovenia  aims  to 
invest  in  green,  resilient,  sustainable  and  digitally 
connected 
greening 
infrastructure  and  by  modernising  curricula  to 
include  digital  and  sustainability  competences.  It 
also  aims  to  introduce  more  flexible  learning 
pathways, including through micro-credentials. 

committed 
internationalisation  of 

education, 

Slovenia 

higher 

has 

by 

to 

sustainability  and  financial  literacy.  This  could 
pave  the  way  towards  a  more  comprehensive 
reform.  Currently,  in  Slovenia,  ICT  training  and 
environmental sustainability are not systematically 
incorporated  across  initial  teacher  education  and 
specialist programmes. 

While  vocational  education  and  training 
(VET) is a popular choice among students, the 
employment  of  recent  VET  upper  secondary 
graduates  decreased  between  2018  (84.5%) 
and 2021 (78%) by 6.5 pps. Adult participation 
in 
reskilling  and 
upskilling, is to be further strengthened, especially 
for vulnerable groups (see Annex 14). 

including 

learning, 

lifelong 

61 

96%88.0%91.9%92.6%202093.0%2020Reading< 15%15.1% 20.0%17.9%201822.5%2018Mathematics< 15%16.1% 22.3%16.4%201822.9%2018Science< 15%15.0% 21.1%14.6%201822.3%2018< 9 %5.0%11.0%4.1% 9.6%Men6.4%12.5%4.2%u11.1%Women3.4%u9.4%3.9%u8.0%Cities4.6%u9.6%:u8.6%Rural areas4.8%u12.2%3.8%u10.0%Native4.3%10.0%3.5%u8.3%EU-born:u20.7%:u20.3%Non EU-born17.7%u23.4%:u22.1%6Equity indicator (percentage points)::10.5201819.320187Exposure of VET graduates to work based learningTotal ≥ 60% (2025) : :47.0%60.1%45%40.8%36.5%47.3%42.0%Men30.3%31.2%36.4%36.5%Women52.7%41.8%60.2%47.6%Cities46.5%46.2%55.0%52.2%Rural areas39.1%26.9%43.9%30.2%Native42.6%37.7%51.1%43.0%EU-born28.6%u32.7%55.1%u39.5%Non EU-born17.9%u27.0%17.0%u35.7%35.5% 38.3%36.5%202039.2%2020Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth11Share of school teachers (ISCED 1-3) who are 50 years or over1Participation in early childhood education (age 3+)2Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)3Total3By gender4By degree of urbanisation5By country of birth20152022IndicatorTargetSloveniaEU27SloveniaEU27 
 
  
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
in 
population  health  and  the  health  system 
Slovenia.  

Life expectancy is above the EU average, but 
its  upward  trend  was  disrupted  in  2020  by 
the  advent  of  COVID-19.  Life  expectancy 
rebounded in 2021 with the number of COVID-19 
deaths  remaining  nearly  constant  compared  to 
2020 (120).  In  2020,  the  leading  causes  of  death 
were  diseases  of 
circulatory  systems 
the 
(“cardiovascular diseases”) followed by cancer and 
COVID-19;  treatable  mortality  is  below  the  EU 
average.  Cancer  still  poses  a  significant  burden: 
for most cancers, survival rates are worse than the 
EU  average  (except  for  cervical  cancer),  despite 
significant  efforts  and  dedicated  public  health 
measures.  

(12.5%  of 

recent  efforts  to  reorient  healthcare  service 
delivery from inpatient to outpatient care. Slovenia 
has  one  of  the  lowest  shares  of  out-of-pocket 
healthcare  spending 
total  health 
spending, below the EU average of 14.4%). This is 
mainly  due  to  the  extensive  uptake  (around  73% 
of  the  population)  of  voluntary  health  insurance 
(VHI),  providing  complementary  coverage  for  co-
payments.  However,  overall  private  health 
expenditure is significant, at 26.9% of total health 
spending 
in  2020  (EU  average:  20.3%).  VHI 
accounts  for  more  than  half  of  private  health 
expenditure. 

Public  spending  on  health  is  projected  to 
increase  by  1.5  percentage  points  (pps)  of 
GDP  by  2070.  This  is  much  higher  than  the  EU 
average  (0.9  pps)  and  raises  significant  concerns 
about  the  future  financial  sustainability  of  public 
financing  of  healthcare  (see  Annex  11  and  Graph 
A16.2). 

Graph A16.1: Life expectancy at birth, years 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2019-2070 

Source: Eurostat 

Health  expenditure  is below  the  EU  average, 
despite  increases  in  recent  years.  Resource 
allocation is based on historical budgeting (with no 
further  allocation  by  region  or  need).  An  overall 
annual  budget  cap  applies  to  public  expenditure 
insurance.  Public 
under  the  statutory  health 
funding  accounted  for  around  73%  of  health 
expenditure  in  2020,  well  below  the  EU  average 
(81.2%).  The  main  spending  category  by  budget 
share is outpatient care (curative and rehabilitative 
care),  at  almost  28.8%  (compared  to  22.6%  for 
the EU overall). 

Spending  on  inpatient  care  is  around  the  EU 
average  (at  26.3%  vs  26.4%)  and  spending  on 
pharmaceuticals is above the EU average (17.26% 
vs  13,98%).  This  resource  distribution  reflects 

(120) Based on data provided directly by Member States to ECDC 
under the European Surveillance System (data current as of 
13 April 2023) 

AWG reference scenario  
Source: European Commission / EPC (2021) 

In  2020,  spending  on  prevention  in  Slovenia 
amounted  to  3.2%  of  total  spending  on 
healthcare  (compared  to  3.4%  for  the  EU 
overall). There was only a small  budget increase 
compared  to  2019  (7%,  compared  to  a  26% 
increase  for  the  EU  overall).  Across  the  EU,  this 
increase  was  primarily  driven  by  spending  on 
disease  detection,  surveillance, 
control  and 
response programmes as part of the public health 
response to COVID-19. 

Low  availability  of  resources,  resulting  in 
lagging  accessibility,  and  weak 
care 
coordination  pose  a  challenge  to  the  health 
system. Long waiting times are the main driver of 
reported  unmet  medical  needs  (currently  at  4.8% 
and above the EU average – see Annex 14). Some 
recent short-term measures (extra funding) aimed 

62 

81.281.281.581.680.680.780.980.981.081.380.480.1201620172018201920202021SloveniaEU6.65.90.91.502468EUSlovenia% of GDP20192070increase 
 
        
                                                 
       
 
Table A16.1: Key health indicators 

Note: The EU average is weighted for all indicators, except for (*) and (**), for which the EU simple average is used. The simple 
average for (*) uses data for 2020 or most recent year if former not available. Doctors' density data refer to practising doctors in 
all countries except EL, PT (licensed to practice) and SK (professionally active). Nurses' density data refer to practising nurses in all 
countries except FR, PT, SK (professionally active) and EL (nurses working in hospitals only).  
Source: Eurostat; except: ** ECDC 

among  the  longest  in  the  EU).  Mental  disorders 
and  suicides  represent  a  major  public  health 
problem (with a financial burden estimated at 4% 
of  GDP).  The  suicide  mortality  rate  is  one  of  the 
highest  in  EU,  with  significant  regional  variability. 
The  death  rate  related  to  excessive  drinking, 
closely  linked  to  mental  health,  is  also  much 
higher  than  the  EU  average.  The  share  of  people 
seeking mental care (at only 2.1% vs 5.3% on EU 
average)  is  influenced  by the  lack  of  coordination 
in  planning  access  to  relevant  services  (with 
psychiatrists  concentrated  mainly  in  hospitals), 
low 
stigmatisation  of  mental  disorders,  and 
mental health literacy.  

The  health  component  of  Slovenia’s  recovery  and 
resilience plan (RRP) amounts to around 9% of the 
total  RRP  budget  and  is  expected  to  address 
challenges in resilience, accessibility and quality of 
healthcare  and integration  across  care  levels.  The 
RRP introduces reforms and investments aiming at 
improving  the  accessibility  of  the  healthcare 
system. Proposed measures aim to strengthen the 
networks  and  competence  of  health  personnel  in 
primary care, integrated care and mental care, and 
to  promote 
community-based  services  and 
independent living to ensure quality of care. Major 
investment 
healthcare 
infrastructure aim to significantly upgrade/improve 
the  capacity  to  effectively  address  communicable 
diseases, to digitalise the National Health Service, 
and  to  ensure  that  public  health  institutions 
(including  emergency  services)  have  all  modern 
medical equipment they need.  

projects 

the 

in 

to address exceedingly long waiting times for first 
appointments  in  the  publicly  funded  segment  of 
the outpatient sector. Further efforts to strengthen 
primary  care  rely  on  appropriate  numbers  of 
doctors and an expanded role for nurses in specific 
areas  of  healthcare.  The  number  of  doctors  is 
below the EU average, with only one in five being 
a  general  practitioner  (and  even  lower  rates  in 
rural  and  less  accessible  areas).  For  nurses, 
projections  suggest  that  some  additional  2 000 
new  graduates  will  be  needed  by  2025.  An 
important  challenge  is  to  strengthen  access  to 
primary  care  and  promote  greater  coordination 
and  cooperation  between  primary  care  and 
secondary  care providers. This  should  help  ensure 
care  coordination  and  monitoring  of  complex 
chronic  patients,  and  improve  integration  with 
social  welfare  services.  Reforms  are  planned  to 
alleviate shortages of healthcare workers: a more 
system, 
reliable  health  workforce  planning 
for 
improved 
remuneration  packages  for  health  professionals 
(to address the lack of attractiveness/incentives of 
specialising  in  primary  care  for  young  graduates). 
Slovenia currently also lacks financial resources to 
strengthen and optimise the health and long-term 
care systems. Future reform activity will focus on 
ensuring diversification of health system revenues 
and introducing efficiency-oriented measures for a 
more  consistent  implementation  of  performance 
indicators at all levels of care. The implementation 
of  the  Long-Term  Care  Act  is  expected  to  help 
bring  about  a  gradual  introduction  of  rights  and 
the entry into force of a law on compulsory long-
term care insurance by the end of 2025. 

training,  and  a  new  model 

Mental  disorders  are  the  most  common 
reason  for  disability  retirement.  Moreover, 
they  are  the  third  most  common  reason  for  work 
incapacity  and  sick  leave  (which  are,  on  average, 

63 

20172018201920202021EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)78.277.472.069.8NA91.7 (2020)Cancer mortality per 100 000 population304.8309.3290.1290.7NA242.2 (2020)Current expenditure on health, % GDP 8.28.38.59.5NA10.9 (2020)Public share of health expenditure, % of current health expenditure72.272.872.873.2NA81.2 (2020)Spending on prevention, % of current health expenditure 3.03.13.23.2NA3.4 (2020)Acute care beds per 100 000 population420413413NANA387.4 (2019)Doctors per 1 000 population *3.13.23.33.3NA3.9 (2020)Nurses per 1 000 population *9.910.110.310.5NA8.3 (2020)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day (total consumption for CY and CZ) **11.611.711.58.88.714.5 (2021) 
 
   
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

The  annex  showcases  the  economic  and 
social regional dynamics in Slovenia, providing 
an  update  of  the  economic,  social,  and  territorial 
cohesion 
regions 
in  and  among  Slovenia’s 
compared  with  the  rest  of  the  EU  and  the  main 
regional economic recovery challenges. 

Regional  disparities 
in  Slovenia  have 
remained  prominent  despite  strong  recent 
growth  overall.  Whilst  overall  GDP  growth  in 
Slovenia  in  2021  (8.2%)  and  in  2022  (5.4%)  was 
strong  and  well  above  the  EU  average,  the  gap 
between  the  capital  region  and  other  regions  has 
further  increased  and  is  very  pronounced.  As  for 
2021,  GDP  per  capita  in  PPS  at  NUTS-3  level 
compared  to  the  national  average,  the  Ljubljana 
region  stands  out  at  147%  -  almost  three  times 
higher  than  in  the  Zasavska  region  (53%;  2020: 
144%  and  54%).  This  is  the  largest  difference 
since the monitoring of these data began. 

Graph A17.1: GDP per capita (2010) and GDP growth 
(2011-2020), Slovenia (NUTS 3 regions) 

capita  of  the  national  average.  This  is  a  slight 
increase  compared  to  2020,  where  figures  stood 
at 83% and 119% respectively. 

The regional differences in GDP per employee 
are  more  nuanced  and  reflect  the  intense 
level of daily work commuting. At NUTS-3 level 
in 2021, the capital region accounted for 112% of 
lowest- 
the  national  average,  whilst 
performing  Pomurska  region  stood  at  86%.  This 
lower difference - compared to GDP per capita - is 
also due to the intense daily communting into the 
region,  predominantly  by  cars.  This, 
capital 
alongside the substantial fuel sales in Slovenia as 
a  transit  country,  has  contributed  to  the  30%-
increase of the transport sector’s carbon-footprint 
in Slovenia’s between 2005 and 2020. 

the 

The  transition  from  fossil-fuels  energy 
production  is  a  core  challenge  for  Slovenia. 
The  transition  towards  the  EU’s  2030  energy  and 
climate targets and a climate-neutral economy by 
2050 require the medium-term phase-out of CO2-
intensive coal. In the Savinjsko-Šaleška region, the 
coal  mining  in  Velenje  and  the  Šoštanj  power 
plant’s  lignite  blocks  will  be  phased  out  by  2033. 
The  Zasavska 
incomplete 
transition away from coal. The  challenges in these 
two  coal  regions  are  different  in  scale,  but 
centered around decarbonisation and expansion of 
renewable  energies,  economic  diversification,  and 
creating  new  job  opportunities.  These  Eastern 
Slovenian regions are benefitting from support by 
the Just Transition Fund (JTF; see Map A17.1). 

faces  an 

region 

Source: EUROSTAT, DG REGIO elaboration 

Map A17.1:  Territories most affected by the 
climate transition in Slovenia (NUTS 3 and below) 

There has been some long-term convergence 
with  the  rest  of  the  EU,  but  disparities 
between  regions  have  remained.  GDP  per-
capita  growth  in  the  capital  region  was  slightly 
higher than the national average of 1.3% per year 
after  2011,  but  clearly  above  the  EU  average  of 
0.6%. Half of the other NUTS-3 regions in Slovenia 
showed  stronger  growth,  with  Posavska  as  the 
frontrunner  at  2%  per  year.  However,  Zasavska, 
which had the lowest GDP per head in 2010, also 
had  the  lowest  annual  growth  (0.04%)  during 
2011-2020 (see Graph A17.1). 

Convergence  between  the  NUTS-2  regions 
has  not  improved  in  recent  years.  In  2021, 
Eastern  Slovenia  (82%)  continued  to  lag  behind 
Western  Slovenia  (120%)  in  terms  of  GDP  per 

64 

0.00.51.01.52.02.530405060708090100110120130Annual real GDP per head growth 2010-2020GDP (PPS) per head in 2010 (EU = 100)Capital regionOther NUTS3 regionsNational averageEU27 
 
 
 
 
 
Table A17.1: Selected indicators at regional level in Slovenia 

Source: EUROSTAT 

Source: DG REGIO 

The  productivity  gap  between  Eastern    and 
Western  Slovenia  has  narrowed  recently. 
Annual real productivity growth in Eastern Slovenia 
(1.0% in 2011-2020)  was higher than in Western 
Slovenia  (0.6%). 
In  both  regions,  productivity 
growth was noticeably higher than the EU average 
(0.2%).  However,  overall  productivity  in  Slovenia 
was  still  20%  lower  than  in  the  EU  in  2020  (see 
Graph  A17.2).  As  for  regional  competiveness, 
Western  Slovenia  stood  at  110%  and  Eastern 
Slovenia  at  99%  of  EU  average  in  2022.  The 
unemployment rate in cities is slightly higher than 
in  rural  areas.  Overall,  the  share  has  strongly 
decreased in all types of regions since 2013. 

Graph A17.2: Labour productivity (real GVA per 
worker), EU-27, Slovenia (NUTS 2), 2000-2020 

Source: EUROSTAT, DG REGIO elaboration 

Graph A17.3: Unemployment, Slovenia, 2019-2021 

Source: EUROSTAT, DG REGIO elaboration 

have 

social 

Many 
shown 
indicators 
continuous improvement despite a persisting 
urban-rural divide.  About 40% of the Slovenian 
population  aged  25-64  have  a  higher  education 
degree - above the EU average of 33%. The share 
is considerably higher in cities (53%) than in towns 
(41%) and rural areas (34%). The shares increased 
in  all  region  types  in  2011-2021,  but  the  rate  of 
increase  was  somewhat  higher in  rural  areas  and 
lower in cities, which suggests some convergence.  

consequences  were 

Both  NUTS-2  regions 
in  Slovenia  were 
affected by the COVID pandemic. However, the 
social-economic 
slightly 
different.  In  contrast  to  the  upward  trend  2015-
2019,  the  employment  rate  dropped  in  both 
regions in 2020, but recovered in 2021 and 2022. 
The  unemployment  rate  rose  in  both  regions  in 
2020  and  continued  to  increase  in  the  capital 
region  in  2021,  but  fell  in  Eastern  Slovenia  in 
2021, and is now at a record low nationwide. 

65 

0123456Vzhodna SlovenijaZahodna SlovenijaUnemployment (%)201920202021NUTS-2 RegionGDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growthGDP per head growthPopulation growthUnemployment rateRegional Competitiveness IndexCO2 emissions per headInnovation performanceEU27=100, 2021EU27=100,  2021Avg % change on preceding year, 2010-2020Avg % change on preceding year, 2010-2020Total % change, 2011-2020% of active population, 2021Range 0-100,  2022tCO2 equivalent,  2021EU Regional Innovation Scoreboard, 2022European Union1001001.001.002.07.0100.08.8Slovenija90820.801.572.84.7104.2Vzhodna Slovenija74750.951.340.65.099.411.4Moderate innovator oZahodna Slovenija108880.641.755.44.5109.66.2Moderate innovator o 
 
 
 
 
 
 
 
 
  
 
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

to 

revaluations, 

to  securities 

Despite  the  pandemic  and  the  Russian 
invasion  of  Ukraine,  the  profitability  of 
Slovenian  banks  has  remained  solid  thanks 
to  improving  asset  quality,  but  solvency  has 
slightly  deteriorated.  Return  on  equity  has 
systematically  exceeded  9%  since  2017,  mainly 
release  of 
the  continuous  net 
thanks 
impairments.  However,  because  of  the  rise  in 
lending activity and a decline in regulatory capital 
due 
the  capital 
adequacy  ratio  deteriorated  in  2022  and  reached 
17.0%  in  September  2022  (vs  18.6%  in  the  EU). 
Slovenian  banks  have  no  significant  exposure  to 
Russia  or  Ukraine.  The  only  exception  was  the 
Slovenian  subsidiary  of  Sberbank,  which  was 
smoothly  resolved  and  sold  to  NLB,  the  largest 
domestic  bank,  on  1 March 2022.  The  non-
performing-loan  ratio  kept  improving  and  fell  to 
1.9%  in  September  2022  (vs  1.8%  in  the  EU), 
down  from  3.0%  in  2020.  Credit  to  households 
and  to  non-financial  corporations  has  strongly 
recovered  from  the  pandemic  lows  and  grew 
strongly at year-on-year rate of respectively 7.7% 
(vs 3.7% in the euro area) and 12.4% (vs 5.5% in 
the euro area) in December 2022. With a loan-to-
deposit ratio of 70.0% (vs 87.9% in the EU) in Q2-
2022,  banks  benefit  from  a  substantial  excess  of 
deposits  over  loans.  This  ensures  a  relatively 
stable  funding  basis  and  abundant  liquidity.  The 
new  law  voted  on  2 February 2022  capping  the 
exchange  rate  on  Swiss-franc  loans  could  have 
negatively  affected  the  banking  sector,  but  the 
Constitutional  Court  annulled 
law  on 
14 December 2022. However, several lawsuits are 
still  underway  and  these  may  lead  to  significant 
losses for some banks if the rulings are in favour 
of the borrowers. 

this 

The residential real-estate market is showing 
medium  vulnerabilities 
that  are  being 
mitigated  by  appropriate  and  sufficient 
macroprudential policy measures. In 2022, the 
European  Systemic  Risk  Board  (ESRB)  identified 
several  key  vulnerabilities  in  the  Slovenian  real-
estate  market:  elevated  house  price  growth; 
elevated growth in mortgage lending; and lending 
standards  that  were  improving  but  still  relatively 
loose.  The  ESRB  observed  that  Slovenia’s  current 
policy  mix  is  appropriate  and  sufficient  and  that 
in 
this 
mitigating  risks.  The  current  macroprudential 
restrictions on consumer lending lay down binding 
caps on the loan maturity and the debt-service-to-

framework  had  been 

instrumental 

66 

income  ratio,  and  a  non-binding  cap  on  the  loan-
to-value  (LTV)  ratio.  These  limits  have  been 
effective  at  improving  lending  standards  on  new 
mortgage  loans.  However,  these  restrictions  were 
partially relaxed on 1 July 2022. On 29 April 2022, 
the  Bank  of  Slovenia,  the  country’s  central  bank, 
decided  to  implement  (as  of  1 January 2023)  a 
sectoral  systemic  risk  buffer  of  1%  on  retail 
mortgages  and  0.5%  for  other 
loan 
exposures.  This  additional  capital  buffer  was 
justified  by  the  risks  arising  from:  (i)  increased 
prices  for  real-estate;  (ii)  the  growth  in  mortgage 
loans;  (iii)  an  environment  of  low  interest  rates; 
and  (iv)  the  partial  relaxation  of  macroprudential 
lending.  Finally,  on 
restrictions  on  household 
7 December 2022, the Bank of Slovenia decided to 
increase its countercyclical risk buffer from 0% to 
0.5% (as of 31 December 2023) as a result of the 
increase in systemic risks. 

retail 

Despite  inflation,  Slovenian  banks  finance 
the  economy  on  quite  reasonable  terms.  In 
general,  interest  rates  offered  on  mortgage  loans 
in  Slovenia  have  always  been  slightly  higher than 
the  euro-area  average.  After  a  long  period  of 
decline that started in September 2008, mortgage 
rates  reached  an  all-time  low  at  1.53%  in  May 
2022 before soaring to 3.43% in November 2022 
(vs 2.93% in the euro area). In contrast, corporate 
loans up to EUR 1 million were significantly more 
expensive  in  Slovenia  until  2015,  when  interest 
rates  started  to  converge  towards  the  euro-area 
average. They reached an all-time low at 1.86% in 
March  2022  before 
in 
November 2022 (vs 3.32% in the euro area). 

to  3.61% 

jumping 

Sustainable finance is not yet very developed 
in Slovenia, but some recent initiatives have 
shown  growing  awareness  of  the  sector’s 
potential.  In  June  2021,  Slovenia  issued  a 
sovereign  sustainability  bond  of  EUR  1 bn.  In  July 
2021,  the  Bank  Association  of  Slovenia  issued 
regulatory 
guidelines 
requirements 
financing  and 
sustainable 
providing  banks  with  non-binding  guidelines  for 
financing 
the  development  of 
according  to  the  principle  of  proportionality.  In 
August  2022,  the  Bank  Association  of  Slovenia 
also  prepared  a  sample  questionnaire  to  assess 
the  environmental,  social  and  management  (ESG) 
aspects of the companies financed by banks. 

summarising 

sustainable 

key 

in 

 
 
 
 
Table A18.1: Financial soundness indicators 

(1) Last data: Q3-2022. 
(2) Data are annualised. 
Source: ECB, Eurostat, S&P Global Capital IQ Pro. 

The  Bank  of  Slovenia  has  set  up  a  FinTech 
innovation  hub.  This  dedicated,  single  point  of 
contact  aims  to:  (i)  facilitate  the  exchange  of 
information related to innovative business models; 
and  (ii)  clarify  regulatory  requirements  for  the 
areas  within  the  competence  of  the  Bank  of 
Slovenia.  The  innovation  hub  targets  businesses 
planning  to  provide  solutions  based  on  financial 
technologies  in  Slovenia  or  within  the  European 
Economic Area. 

The  insurance  market  is  highly  concentrated 
and  largely  state-owned.  It  is  dominated  by 
Zavarovalnica  Triglav  (27%  of  market  share), 
followed  by  Zavarovalnica  Sava  (19%),  Generali 
(18%)  and  Vzajemna  (14%).  Together,  these  four 
companies controlled nearly 80% of the insurance 
market in 2020. Generali significantly increased its 
market  share 
in  2020  by  acquiring  Adriatic 
Slovenica  Zavarovalna  druzba.  The  two  largest 
insurers are controlled by the Slovenian state. 

Insurers’  profitability  and  solvency  have 
improved,  but  unexpectedly  high  inflation  is 
a  concern  for  non-life  insurance.  Insurers’ 
gross written premiums again increased slightly in 
2021  compared  with  2020,  driven  primarily  by 
non-life  insurance.  The  claims  ratio  improved  in 
both non-life and life insurance, but deteriorated in 
the  health-insurance  sector  as  a  result  of  the 
COVID-19 pandemic. The profitability of insurance 
and reinsurance corporations improved strongly in 
2021,  as  did  their  capital  adequacy,  with  a  slight 
increase in the solvency ratio from 231% in 2020 
to  235%  in  June  2022  (vs  269%  in  the  EU). 

67 

is 

the 

the 
However,  as 
unexpectedly  high  inflation  is  likely  to  generate 
significant losses for the non-life, especially long-
tail, businesses in Slovenia.  

case  elsewhere, 

in 

Slovenian  capital  markets  remain  less  liquid 
and  developed  than  the  EU  average,  but 
reforms  are  underway.  Slovenian  corporations 
rely  more  on  bank  funding  and  less  on  market 
funding  relative  to  the  EU  average.  The  Ljubljana 
Stock  Exchange  continues  to  face  very  low  and 
decreasing  liquidity.  In  2021,  its  trading  volume 
dropped  by  5.5%  to  reach  only  EUR  380  million. 
However, 
terms  of  value,  some  specific 
segments  continued  to  grow.  For  instance,  the 
value  of  alternative-investment-fund  assets 
surged  by  64%  to  a  total  of  EUR 374  million  in 
December 2021. Likewise, domestic mutual funds 
recorded  high  growth 
in  their  assets  under 
management  in  2021.  Net  inflows  into  mutual 
funds were above their historical average in 2021, 
with  equity  funds  recording  the  largest  inflows. 
Domestic  mutual  funds  hold  most  of  their  assets 
in  equity  and  investment-fund  shares/units,  which 
exposes 
risk.  The  equity 
investments  of  domestic  mutual  funds  mostly 
focus  on  the  US.  Their  exposure  to  public  limited 
companies  in  Russia  and  Ukraine  is  low.  The 
recovery and resilience plan includes plans for two 
reforms to strengthen capital markets in Slovenia, 
namely:  (i)  the  adoption  of  a  new  act  on 
the 
(ii) 
alternative 
implementation  of  a  new  strategy  for 
the 
Slovenian  capital  market,  setting  out  specific 
measures for further development. 

funds;  and 

to  market 

investment 

them 

201720182019202020212022EUMedianTotal assets of the banking sector (% of GDP)94.088.687.998.294.687.8276.8207.9Share (total assets) of the five largest banks (%)61.560.860.967.368.7--68.7Share (total assets) of domestic credit institutions (%)154.254.051.048.349.151.3-60.2NFC credit growth (year-on-year % change)1.91.52.70.37.212.4-9.1HH credit growth (year-on-year % change)7.26.86.10.75.37.7-5.4Financial soundness indicators:1        - non-performing loans (% of total loans)9.26.03.43.02.11.91.81.8- capital adequacy ratio (%)18.117.918.518.318.417.018.619.8- return on equity (%)29.110.710.311.39.513.96.16.6Cost-to-income ratio (%)163.759.959.459.559.856.960.651.8Loan-to-deposit ratio (%)174.773.173.366.665.470.688.678.0Central bank liquidity as % of liabilities3.53.32.83.55.61.7-2.9Private sector debt (% of GDP)76.172.568.669.566.4--120.7Long-term interest rate spread versus Bund (basis points)64.353.452.858.944.475.0-93.3Market funding ratio (%)34.034.032.232.230.6-50.840.0Green bonds issued to all bonds (%)-0.30.30.20.20.23.92.31-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States. 
 
   
 
ANNEX 19: TAXATION  

This  Annex  provides  an 
indicator-based 
overview of Slovenia’s tax system.  It includes 
information on the tax structure (the types of tax 
that  Slovenia  derives  most  of  its  revenue  from), 
the  tax  burden  on  workers,  and  the  progressivity 
and redistributive effect of the tax system. It also 
provides 
tax  collection  and 
compliance.  

information  on 

Slovenia’s  tax  revenues  in  relation  to  GDP 
are slightly lower than the EU aggregate and 
some  relatively  growth-friendly  taxes  are 
underused.  Slovenia’s  labour  tax  revenues  as  a 
percentage  of  GDP  were  slightly  below  the  EU 
aggregate  in  2021  (Table  A19.1).  Slovenia  relied 
heavily  on  labour  taxation  reflected  in  a  share  of 
labour taxes in total tax revenues that was above 
the  EU  aggregate  (see  Graph  A19.1).  Revenues 
from  consumption  and  environmental  taxes  as  a 
share  of  total  taxation  were  above  the  EU 
aggregate,  but  revenues  from  capital  taxes  were 
below. Environmental tax revenue as a percentage 
of  total  tax  revenue  and  of  GDP  were  clearly 
above  the  EU  aggregate  and  were  (as  was  the 
case for other EU Member States) almost entirely 
composed  of  energy  and transport  taxes (see the 
graph  on  page  90  of  the  Annual  Report  on 
Taxation 2022).  At the same time, revenues from 
recurrent  property  taxes,  which  are  considered  to 
be  particularly  conducive  to  growth,  were  clearly 
below the EU aggregate. A greater use of recurrent 

Table A19.1: Taxation indicators 

property  taxes  would  have  the  potential  to 
increase  tax  revenue  and  boost  economic  growth. 
Finally, against a background of high inflation and 
high living costs, Slovenia temporarily reduced VAT 
rates  for  electricity,  gas,  heating  and  firewood 
from 22% to 9.5%. 

Slovenia’s  labour  tax  wedge  is  high  across 
different  wage  levels  and  the  labour  tax 
burden  is  less  progressive  than  the  EU 
average.  The  labour  tax  wedge  for  Slovenia  in 
2022  was  higher  than  the  EU  average  at  various 
income  levels,  in  particular  for  single  people  at 
50%  of  the  average  wage  (see  Graph  A19.2). 
Second  earners  at  a  wage  level  of  67%  of  the 
average  wage,  whose  spouses  earn  the  average 
wage,  also  were  subject  to  a  tax  wedge that  was 
considerably higher than the EU average. However, 
the  difference  between  their  tax  wedge  and  that 
of  single  earners  at  the  same  wage  level  was 
slightly  below  the  EU  average.  Slovenia  is  one  of 
the  Member  States  with  the 
income 
inequality as measured by the GINI coefficient and 
the  tax  benefit  system  helped  reduce  income 
inequality  by  more  than  the  EU  average  in  2021. 
Personal  income  tax  cuts  in  the  spring  of  2022 
reduced the labour tax burden at the cost of lower 
labour  tax  revenues  but  were  mostly  reversed  by 
changes  to  the  Personal  Income  Tax  Act  entered 
into  force  in  2023.  The  reversals  will  mostly 
benefit  low-income  earners,  while  high  incomes 

lowest 

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average 
For more data on tax revenues as well as the methodology applied, see European Commission, Directorate-General for Taxation 
and Customs Union, Taxation trends in the European Union: data for the EU Member States, Iceland, Norway and United Kingdom: 
2021 edition, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2778/843047 and the Data on 
Taxation webpage, https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
For more details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in the 
EU: report 2022, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2778/109823.  
Source: European Commission, OECD. 

68 

2010201920202021202220102019202020212022Total taxes (including compulsory actual social contributions) (% of GDP)38.037.437.538.237.939.940.040.6Labour taxes (as % of GDP)19.618.920.119.920.020.721.320.9Consumption taxes (as % of GDP)13.713.412.312.810.811.110.711.2Capital taxes (as % of GDP)4.75.15.15.47.18.18.08.5Total property taxes (as % of GDP)0.60.60.60.61.92.22.22.2Recurrent taxes on immovable property (as % of GDP)0.50.50.50.51.11.21.21.1Environmental taxes as % of GDP3.63.32.92.82.42.42.22.2Tax wedge at 50% of average wage (Single person) (*)33.737.237.239.539.233.932.331.932.131.7Tax wedge at 100% of average wage (Single person) (*)42.543.543.143.542.841.040.139.939.739.7Corporate income tax - effective average tax rates (1) (*)17.517.517.519.519.419.1Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.69.39.58.58.67.78.17.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)6.76.131.640.7VAT Gap (% of VAT total tax liability, VTTL)5.55.511.09.1SloveniaEU-27Tax structureProgressivity & fairnessTax administration & compliance 
 
 
 
      
 
 
 
 
 
 
 
 
 
 
Graph A19.1: Tax revenues for different tax types as % of total taxation 

Note: Values for EU are GDP-weighted EU averages (EU aggregates) 
Source: European Commission 

is  doing  moderately  well 

will  be  subject  to  higher  taxes  than  in  2022. 
Slovenia 
in 
digitalising  its  tax  administration,  which  can 
help  reduce  tax  arrears  and  compliance 
costs.  Outstanding  tax  arrears  have  declined 
slightly  by  0.6  percentage  points  (pp.)  to  6.1%  of 
total  net  revenue.  This  is  significantly  below  the 
EU-27  average  of  40.7%,  but  that  average  is 
inflated  by  very  large  values  in  a  few  Member 
States.  However,  compliance  costs  for  companies 
in Slovenia are much higher than the EU average, 
both for completing tax returns and for complying 
with corporate income tax audits. The VAT gap (the 
gap  between  revenues  actually  collected  and  the 
in 
theoretical 
Slovenia at 5.5% and is below the EU-wide gap of 
9.1%.  Legislative  changes 
reintroduced 
mandatory  receipts  at  cash  registers  have  been 
adopted. 

remained  stable 

liability) 

that 

tax 

Graph A19.2: Tax wedge for single and second 
earners as a % of total labour costs, 2022 

(1) Second earner tax wedge assumes first earner at 100% of 
the average wage and no children. For the methodology of 
the tax wedge for second earners see OECD (2016) "Taxing 
Wages 2014-2105" 
Source: European Commission 

69 

39.239.742.845.843.32025303540455050100150Tax wedge, % of total labour costsEarnings in % of the average wageSingle earner - SISingle earner - EU averageSecond earner -  SISecond earner -  EU average51.4327.5421.0152.2233.5614.21Tax revenue shares in 2021, Slovenia (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital6.034.320.991.000.280.191.262.640.352.75012345678Slovenia -environmentaltaxationEU -environmentaltaxationSlovenia -property taxationEU - propertytaxationEnvironmental and property taxation as % of total tax revenue, Slovenia and the EUEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
 
 
 
 
 
 
 
 
 
 
  
 
  
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1: Key economic and financial indicators 

(1) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. Data before Q4 2014 reflects the national definition of non-performing exposures. 
(2) Net international investment position (NIIP) excluding direct investment and portfolio equity shares.  
Source: Eurostat and ECB as of 2 May 2023, where available; European Commission for forecast figures (Spring forecast 2023). 

70 

2004-072008-122013-1920202021202220232024Real GDP (y-o-y)5.2-1.02.8-4.38.25.41.22.2Potential growth (y-o-y)3.41.81.42.32.63.13.03.1Private consumption (y-o-y)3.10.92.1-6.99.58.91.71.9Public consumption (y-o-y)2.90.91.14.15.80.90.61.8Gross fixed capital formation (y-o-y)7.8-8.93.3-7.913.77.83.93.8Exports of goods and services (y-o-y)13.10.65.9-8.614.56.52.84.0Imports of goods and services (y-o-y) 12.6-1.65.6-9.617.69.82.84.2Contribution to GDP growth:Domestic demand (y-o-y)4.2-1.51.9-4.48.56.31.92.2Inventories (y-o-y)0.8-0.90.20.10.41.1-0.60.0Net exports (y-o-y)0.11.50.70.0-0.8-2.10.00.0Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.10.10.10.70.50.80.60.7Capital accumulation (y-o-y)1.60.6-0.2-0.10.40.70.80.8Total factor productivity (y-o-y)1.61.21.51.71.71.61.61.6Output gap4.3-1.3-2.2-3.22.14.32.61.6Unemployment rate5.96.97.65.04.84.03.93.8GDP deflator (y-o-y)2.81.71.41.32.67.27.34.3Harmonised index of consumer prices (HICP, y-o-y)3.12.70.9-0.32.09.37.03.8HICP excluding energy and unprocessed food (y-o-y)2.51.81.01.01.06.86.83.6Nominal compensation per employee (y-o-y)6.32.72.63.47.94.37.75.3Labour productivity (real, hours worked, y-o-y)5.1-0.11.60.72.71.20.71.8Unit labour costs (ULC, whole economy, y-o-y)2.22.91.37.31.11.47.23.6Real unit labour costs (y-o-y)-0.61.20.06.0-1.5-5.5-0.1-0.8Real effective exchange rate (ULC, y-o-y)0.10.80.13.00.8-2.30.8-0.2Real effective exchange rate (HICP, y-o-y)0.10.20.1-0.1-0.4-0.2..Net savings rate of households (net saving as percentage of net disposable income)9.65.04.516.312.1...Private credit flow, consolidated (% of GDP)14.03.6-1.6-0.93.5...Private sector debt, consolidated (% of GDP)80.8111.984.469.566.4...of which household debt, consolidated (% of GDP)20.329.027.727.826.4...of which non-financial corporate debt, consolidated (% of GDP)60.583.056.741.840.0...Gross non-performing debt (% of total debt instruments and total loans and advances) (1)..10.12.41.7...Corporations, net lending (+) or net borrowing (-) (% of GDP)-6.70.04.03.50.50.22.30.1Corporations, gross operating surplus (% of GDP)18.818.919.620.920.423.124.524.4Households, net lending (+) or net borrowing (-) (% of GDP)4.83.64.211.48.32.02.04.1Deflated house price index (y-o-y)12.8-3.71.35.27.82.7..Residential investment (% of GDP)3.73.42.22.32.42.7..Current account balance (% of GDP), balance of payments-2.6-1.35.07.63.8-0.41.11.8Trade balance (% of GDP), balance of payments-0.70.87.99.36.42.1..Terms of trade of goods and services (y-o-y)-0.7-0.90.50.7-2.1-3.01.81.0Capital account balance (% of GDP)-0.30.0-0.1-0.50.1-0.4..Net international investment position (% of GDP)-15.2-41.4-28.1-15.6-6.8-0.6..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-8.0-37.8-15.01.69.715.3..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)72.5107.599.5101.691.479.7..Export performance vs. advanced countries (% change over 5 years)33.88.63.620.216.7...Export market share, goods and services (y-o-y)4.0-4.63.11.7-0.52.50.10.2Net FDI flows (% of GDP)0.5-0.3-1.70.6-0.8-2.1..General government balance (% of GDP)-1.1-4.7-3.3-7.7-4.6-3.0-3.7-2.9Structural budget balance (% of GDP)-3.1-4.1-2.1-6.1-5.6-5.0-4.9-3.7General government gross debt (% of GDP)25.638.974.579.674.569.969.166.6forecast 
 
 
 
     
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  Annex  assesses  fiscal  sustainability 
risks  for  Slovenia  over  the  short,  medium 
and  long  term.  It  follows  the  same  multi-
dimensional 
European 
Commission’s  2022  Debt  Sustainability  Monitor, 
updated  based  on  the  Commission’s  2023  spring 
forecast. 

approach 

the 

as 

1  -  Short-term  risks  to  fiscal  sustainability 
are 
low  overall.  The  Commission’s  early-
detection  indicator  (S0)  does  not  signal  major 
short-term  fiscal  risks  (Table  A21.2). (121)  Gross 
financing needs are expected to remain significant 
at around 13% of GDP in the short term (i.e. over 
2023-2024),  although  declining  compared  with 
the  recent  peak  in  2020  (Table  A21.1).  Financial 
markets’ perceptions of sovereign risk are positive, 
as confirmed by the ratings of the main agencies. 

2 - Medium-term risks to fiscal sustainability 
are medium overall.  

The  DSA  for  Slovenia  shows  that,  under  the 
baseline, government debt ratio, is projected 
to increase over the medium term to reach a 
level  above  81%  of  GDP  in  2033  (Graph 
1). (122), (123)  The  assumed  structural  primary 
balance  (a  deficit  of  2.3%  of  GDP)  contributes  to 
these 
plausible 
compared with past fiscal performance, indicating 
that the country has room for corrective action. At 

developments. 

appears 

It 

(121) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of macro-financial and 
fiscal variables that have proven to perform well in the past 
in detecting situations of upcoming fiscal stress.  

(122) The assumptions underlying the Commission’s ‘no-fiscal 
policy change’ baseline notably comprise: (i) a structural 
primary deficit, before ageing costs, of 2.3% of GDP as of 
2024; (ii) inflation converging linearly towards the 10-year 
forward inflation-linked swap rate 10 years ahead (which 
refers to the 10-year inflation expectations 10 years from 
now); (iii) the nominal short- and long-term interest rates on 
new and rolled over debt converging linearly from current 
values to market-based forward nominal rates by T+10 (as 
for all Member States); (iv) real GDP growth rates from the 
Commission 2023 spring forecast until 2024, followed by 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10, i.e. for 2025-2033 (on average 2.1%); (v) ageing costs 
in line with the 2021 Ageing Report (European Commission, 
Institutional Paper 148, May 2021). For information on the 
methodology, see the 2022 Debt Sustainability Monitor 
(European Commission, Institutional Paper 199, April 2023). 

from  a 

favourable 

the  same  time,  the  baseline  projections  up  to 
(although 
2033  benefit 
diminishing) snowball effect, notably thanks to the 
impact  of  Next  Generation  EU,  with  real  GDP 
growth  at  around  2.1%  over  2025-2033. 
Government gross financing needs are expected to 
remain  significant  over  the  projection  period, 
reaching  around  17%  of  GDP  in  2033,  above  the 
level forecast for 2024 (Table A21.1). 

The  baseline  projections  are  stress  tested 
against  four  alternative  scenarios  to  assess 
the  impact  of  changes  in  key  assumptions 
(Graph  1).  For  Slovenia,  reverting  to  historical 
fiscal  trajectories  under  the  ‘historical  structural 
primary  balance  (SPB)’  scenario  would  lead  to  a 
significantly  lower  government  debt  ratio.  If  the 
SPB  gradually  converged  to  a  deficit  of  1.3%  of 
GDP (its historical 15-year average), the projected 
debt-to-GDP  ratio  would  be  around  7  pps.  lower 
compared  to  the  baseline  in  2033.  A  permanent 
worsening  of  the  macro-financial  conditions,  as 
reflected  under  the  ‘adverse  interest-growth  rate 
differential’  scenario  (i.e.  1  pp.  higher  than  the 
baseline)  would  result  in  a  persistently  higher 
government debt-to-GDP ratio, by around 6 pps. of 
GDP  by  2033,  as  compared  with  the  baseline.  A 
temporary  worsening  of  financial  conditions,  as 
reflected  in  the  ‘financial  stress  ‘scenario  (i.e. 
temporarily  increase  of  interest  rates  by  1  pp.), 
would lead to a broadly similar debt-to-GDP ratio 
by  2033  compared  with  the  baseline.  The  ‘lower 
structural primary balance (SPB)’ scenario (i.e. SPB 
level  permanently 
the 
cumulative  forecast  change),  would  lead  to  a 
significantly  higher  government  debt-to-GDP  ratio 
by  2033  (around  +7  pps.  of  GDP)  compared  with 
the baseline.  

reduced  by  half  of 

Additionally,  stochastic  debt  projections 
indicate  medium  risk  (Graph  2) (124)  These 
stochastic  simulations  point  to  a  40%  probability 
of  the  debt  ratio  in  2027  being  greater  than  in 
2022,  entailing  medium  risk  given  the  initial 
moderate debt level. In addition, such shocks point 
to  some  uncertainty  (i.e.,  the  difference  between 
the  10th  and  90th  debt  distribution  percentiles) 
the  government  debt  baseline 
surrounding 
projections. 

(123) Table 1 shows the baseline debt projections and its 

(124) These projections show the impact on debt of 2000 different 

breakdown into the primary balance, the snowball effect (the 
combined impact of interest payments and nominal GDP 
growth on the debt dynamics) and the stock-flow 
adjustment. 

shocks affecting the government’s primary balance, 
economic growth, interest rates and exchange rates. The 
cone covers 80% of all simulated debt paths, therefore 
excluding tail events. 

71 

 
 
                                                 
                                                 
 
 
materialisation  of  COVID-19  crisis  related  state 
guarantees.  On  the  other-hand,  risk-mitigating 
factors include the lengthening of debt maturity in 
recent  years  and  relatively  stable  financing 
sources  (with  a  diversified  and  large  investor 
base). In addition, the structural reforms under the 
NGEU/RRF,  if  fully  implemented,  could  have  a 
further  positive  impact  on  GDP  growth  in  the 
coming years, and therefore help to mitigate debt 
risks.
sustainability 

3  -  Long-term  risks  to  fiscal  sustainability 
are high overall. (125)  

in 

The  S2  sustainability  gap  indicator  (at  10 
pps.  of  GDP)  points  to  high  risk,  suggesting 
that  Slovenia  would  need  a  substantial 
improvement 
its  structural  primary 
balance to ensure debt stabilisation over the 
long  term.  This  result  is  mostly  underpinned  by 
the  projected  increase  in  ageing  costs,  notably 
pension  spending  (+5.3  pps.  of  GDP)  as  well  as 
health  care  and 
long-term  care  expenditure 
(combined  contribution  of  2  pps.  of  GDP),  as  well 
as  by  an  unfavourable  initial  budgetary  position 
(2.7  pps.  of  GDP)  (Table  A21.1).  Hence,  while  a 
number  of  investments  and  reforms  in  the  RRP 
contribute  to  supporting  the  efficiency  of  the 
Slovenian health and long-term care systems and 
the sustainability of the pension system, additional 
measures may be required to further improve the 
overall fiscal sustainability. 

indicator  signals 

Combined  with  debt  vulnerabilities,  as 
highlighted by the S1 indicator, overall long-
term risks are assessed as high. Indeed, the S1 
sustainability  gap 
that  a 
substantial consolidation effort of 7.8 pps. of GDP 
would be needed to reduce debt to 60% of GDP by 
2070.  This  result 
is  mainly  driven  by  the 
contribution of ageing costs (5.5 pps. of GDP) and, 
an unfavourable initial budgetary position (2.2 pps. 
of GDP) (Table A21.1).  

Finally,  several  additional  risk  factors  need 
to  be  considered  in  the  assessment.  On  the 
one hand, risk-increasing factors are related to the 
recent  increase  in  interest  rates,  the  share  of 
government  debt  held  by  non-residents,  and  to 
liability  risks  stemming  from  the 
contingent 
the  possible 
private 

including  via 

sector, 

(125)The S2 fiscal sustainability gap indicator measures the 

permanent fiscal effort (SPB adjustment) in 2024 that would 
be required to stabilise public debt over the long term. It is 
complemented by the S1 fiscal sustainability gap indicator, 
which measures the permanent fiscal effort required in 2024 
to bring the debt-to-GDP ratio to 60% in the long term (by 
2070). For both the S1 and S2 indicators, the risk 
assessment depends on the amount of fiscal consolidation 
needed: ‘high risk’ if the required effort exceeds 6 pps. of 
GDP, ‘medium risk’ if it lies between 2 pps. and 6 pps. of 
GDP, and ‘low risk’ if the effort is negative or below 2 pps. of 
GDP. The overall long-term risk classification brings together 
the risk categories derived from S1 and S2. S1 may notch up 
the risk category derived from S2 when it signals a higher 
risk than S2. See the 2022 Debt Sustainability Monitor for 
further details. 

72 

 
                                                 
Table A21.1: Debt sustainability analysis - Slovenia 

Source: Commission services. 

Table A21.2: Heat map of fiscal sustainability risks - Slovenia 

Source: Commission services. 

73 

Table 1. Baseline debt projections20202021202220232024202520262027202820292030203120322033Gross debt ratio (% of GDP)79.674.569.969.166.666.066.066.867.869.471.674.377.581.2Changes in the ratio14.2-5.1-4.5-0.8-2.5-0.70.10.81.01.62.22.73.23.7of whichPrimary deficit6.13.41.92.51.61.92.32.73.03.23.53.84.14.4Snowball effect3.7-6.7-7.5-4.4-3.0-2.6-2.2-1.9-1.9-1.6-1.3-1.1-0.8-0.7Stock-flow adjustments4.4-1.81.01.1-1.10.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)20.813.514.114.511.412.412.713.113.513.914.415.015.616.6S1S2Overall index  (pps. of GDP)7.810.0of which Initial budgetary position2.22.7Debt requirement0.1Ageing costs5.57.4of which    Pensions4.15.3     Health care0.81.0     Long-term care0.61.0Others0.00.1Table 2. Breakdown of the S1 and S2 sustainability gap indicators3040506070809010020202021202220232024202520262027202820292030203120322033Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p904045505560657075808520202021202220232024202520262027% of GDPGraph 2. Stochastic debt projections 2023-2027MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallMEDIUMMEDIUMMEDIUMMEDIUMMEDIUMMEDIUMDebt level (2033), % GDP81.274.188.287.181.8Debt peak year20332033203320332033Fiscal consolidation space76%58%83%76%76%Probability of debt ratio exceeding in 2027 its 2022 level40%Difference between 90th and 10th percentiles (pps. GDP)28.9(1)Debtlevelin2033.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidtationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2027its2022level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)LOWMEDIUMHIGHHIGHHIGH