In 2025, the general government deficit increased to 2.5% of GDP (0.9% of GDP in 2024), mainly as a result of a significant growth in expenditure. Expenditure growth was mainly due to higher labour costs triggered by the start of the salary system reform and the introduction of winter bonus, continued increase in social benefits and stronger investments. The revenue growth slowed down, which was mainly due to poorer corporate results and slower labour market.
The general government gross debt (65.7%) decreased to the pre-COVID-19 level, mainly due to inflation. During the last month, financial market situation has deteriorated as a result of geopolitical tensions, but most of Slovenia’s borrowing for this year was done on favourable conditions.
In the first three months of this year, the state budget showed a deficit of EUR 700 million, an increase on the same period last year. Revenue growth remained solid (7.0%), mainly due to higher receipts from VAT, EU funds, and personal income taxes. However, it continues to be considerably lower than increase in expenditure (13.0%). This was mainly due to higher labour costs associated with the introduction of a new salary system and stepped up investment activity, particularly in defence. Expenditure growth is further driven by transfers to individuals and households and to the health insurance fund. The current budget forecast for the entire year shows a deficit of EUR 2.1 billion.
In accordance with the Fiscal Rule Act, the Government is required to submit to the National Assembly and to the Fiscal Council for assessment a draft of the annual report on the progress in the implementation of the medium-term plan. According to the law, the Fiscal Council will prepare an assessment of compliance of data on the outturn of the general government budgets including the net expenditure path set out in the medium-term plan within seven days of receiving the annual progress report.