German investors have ranked Slovenia the most attractive business location among 16 Central and East European countries (CEE) in the latest survey presented by the German-Slovenian Chamber of Commerce.

German investors' interest in Slovenia has increased again after a dip observed in 2023, with the country replacing Estonia as their favourite destination since 2019.

Estonia this time ranks below Slovenia, Poland and the Czech Republic, and ahead of Croatia and Slovakia.

Presenting the survey in Ljubljana on 28 May, the chamber's president Dagmar von Bohnstein said Slovenia proved to be a strong business partner for German investors.

Even though the market is relatively small, many German companies draw on the extensive expertise of Slovenian companies, their innovation capacity and highly qualified professionals, thus relying on the traditionally good cooperation, especially in the automotive and industrial sectors.

German investors labelled the economic situation in Slovenia satisfactory, with slightly rising expectations. Investment in research and development is increasing year-on-year, led by investment in digitisation and automation of work processes.

The use of artificial intelligence has also grown significantly in the last year and has become an indispensable part of work.

Challenges remain

Standing out among remaining challenges are high tax burdens, the unpredictability of economic policies, the fight against corruption, the inefficiency of the public administration, the relatively high labour costs and shortages of skilled staff.

Although the economic situation is improving slightly, there is still uncertainty about the future.

The main reasons for this are the country's unpredictable economic policy, the ongoing energy crisis and persistently high inflation, Von Bohnstein said.

She noted that half of the respondents remain pessimistic about the future stability of the economic environment, calling for action to be taken in this respect. She acknowledged that many other countries are also facing challenges like workforce shortages.

According to Mladen Ljubas, a member of the Chamber's board and the director of logistics company Schenker, Slovenian companies are successfully coping with the challenging economic conditions resulting from the tense geopolitical situation.

"Slovenia has a good strategic location and a stable business environment, which is why it is attractive for many investors," he said at the presentation of the survey, carried out between 19 February and 15 March among 101 companies.

Von Bohnstein lauded German-Slovenian economic relations as stable and good. German companies in Slovenia provide around 50,000 jobs directly and through suppliers, she pointed out.