Inflation and GDP

 

In this more than half-year period of 2025, we like to boast about a successful economy. We forgot about the deaths of the Covid-19 epidemic, which brought freed jobs and reduced unemployment. This year is also marked by an increased mortality rate of soldiers deployed to Ukraine. When assessing economic success, we also forget that we have fallen into an era of inflation.

In 2025, we also like to boast about a growing GDP (gross domestic product per capita), which somehow also coincides with the observed inflation.

We could console ourselves that we live better in terms of the employment rate and unemployment rate, if we do not take into account how many jobs this year's deaths free up. The employment rate has risen by 0.1 in the EU and European areas since the previous quarterly period. It is worse than the first quarter, as employment increased by 0.2% in this period.

As an example, we can cite data on Slovenia in numbers. In any case, Slovenia still has a 3.2% unemployment rate among the working population, which totals 942,877, which is less than half of the population of Slovenia.


GDP and inflation

Last year's inflation (less than 5% in Slovenia) already caused an increase in incomes from wages, pensions and other social contributions at the beginning of 2025. This, of course, also increased income per capita. Of course, Slovenia is not the only country that has increased incomes in relation to the annual inflation rate.

In August 2025, an average inflation of 2.1% was determined for the EU area. The USA has a compatible GDP growth in relation to inflation in the same period last year, namely 2.0%. The European Union, however, has an increased GDP of only 1.5%. The entire European area, including Iceland, Norway and Switzerland, has an increase of 1.4%. Thus, we can safely conclude that on average, inflation in the EU is higher than the increase in GDP. Inflation also means an increase in the cost of living or a deterioration in the standard of living. No country in the EU has a GDP growth rate above the inflation rate.

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