Banks have been doing business in an environment of moderate economic growth this year. The gradual cuts in the ECB’s key interest rates are also being reflected in lending to the non-banking sector. Banks are continuing to lend mostly to the household sector (predominantly consumer loans), while corporate lending remains weak. Deposits by the non-banking sector remain a stable source of funding for Slovenian banks, with a notable inflow of household deposits this year.

Cash remains the most commonly used payment instrument in the euro area, but its level of use is declining. Conversely the use of electronic payments is strengthening, and they are prevalent in large-value payments. The majority of the participants in the study judge electronic payments to be faster and simpler, but also mention the importance of being able to pay with cash. Banka Slovenije finds that the share of everyday payments made in cash in Slovenia remains among the highest figures in the euro area.

According to the economic projections released today by Banka Slovenije, economic growth has slowed this year following the rapid post-pandemic recovery, but will strengthen again between 2025 and 2027 to average 2.5% over this horizon. Employment growth will however be slower than in recent years. After falling sharply, inflation will stabilise close to the 2% price stability target rate over the projection horizon. The projections are accompanied by risks associated with structural challenges, and with geopolitical uncertainty and potential protectionist measures in international trade.