Page 77 - SE Outlook Regions 2023

2.11.2 External environment

Slovenia’s current account deficit is seen at 0.8% of GDP in 2023 up
from a deficit of 0.2% in 2022 after years of surpluses, before being flat
in 2024.

Trade activity in the third quarter of 2022 grew by 6.4% and contributed
the most to the structure of total value added for the fourth consecutive
quarter.

In most activities, economic activity slowed down, while for some of
them it declined (agriculture, real estate activities, public administration,
education, human health and social work). Acceleration was observed
in construction (annual growth was 10.4%; in the previous quarter
7.7%).

According to the International Monetary Fund (IMF), the country’s
current account deficit is projected at 0.1% of GDP in 2022, then turning
to a surplus of 0.4% of GDP in 2023. This follows a surplus of 3.8% of
GDP in 2021.

Slovenia posted a current account gap of only €4.4mn in the first nine
months of 2022, compared to a surplus of nearly €1.9bn in the same
period in 2021, according to central bank data. However, the cumulative
current account deficit narrowed compared with the previous months,
mostly due to higher surplus posted in September, of €410.3mn versus
€251.6mn in the same month in 2021

In the third quarter, Slovenia’s exports increased by 11%, somewhat
faster than imports at 10.7% – the first time after five consecutive
quarters of a faster increase in imports than in exports, according to
statistics office data.

The Organisation for Economic Co-operation and Development (OECD)
said that direct trade with Russia and Ukraine was low at the onset of
the war, although nearly all gas and 17% of oil and petroleum imports
came from Russia. Since then, dependence on Russian gas and oil
imports has been reduced through the diversification of suppliers. Also,
gas storage targets were met earlier than expected. Nonetheless,
higher international energy prices have a negative impact on the trade
balance and contribute to inflationary pressures. Higher gas prices are
also weighing on gas-intensive manufacturing (such as basic metals,
chemicals, paper and paper products), which accounts for 4.5% of
employment, more than almost anywhere else in Europe.

The increase in exports was driven by exports of services, which rose
by 21.5%, while imports of services went up by 8.4%.

The central bank said that the current account deficit has been
increasing due to the high import prices of energy products and raw
materials.

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