2014 Index of Economic Freedom

Slovenia

overall score62.7
world rank74
Rule of Law

Property Rights60.0

Freedom From Corruption61.0

Limited Government

Government Spending22.6

Fiscal Freedom58.9

Regulatory Efficiency

Business Freedom85.4

Labor Freedom51.0

Monetary Freedom80.3

Open Markets

Trade Freedom87.8

Investment Freedom70.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 2.1 million
  • GDP (PPP):
    • $58.0 billion
    • -2.3% growth
    • -1.1% 5-year compound annual growth
    • $28,195 per capita
  • Unemployment:
    • 9.0%
  • Inflation (CPI):
    • 2.6%
  • FDI Inflow:
    • $144.8 million
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Slovenia’s economic freedom score is 62.7, making its economy the 74th freest in the 2014 Index. Its score has increased by 1.0 point since last year, with substantial improvements in labor freedom, business freedom, and freedom from corruption outweighing declines in fiscal freedom and monetary freedom. Slovenia is ranked 34th out of 43 countries in the Europe region, and its overall score is above the world average.

Slovenia was first graded in the 1996 Index, and its economic freedom score has advanced since then by 12.3 points, the best improvement among advanced economies. The overall increase has been broad-based in seven of the 10 economic freedoms, including investment freedom, trade freedom, property rights, and freedom from corruption, all of which have improved by about 30 points or more. These substantial gains, however, have been partially offset by deteriorations in the management of public finance and financial freedom.

Despite several setbacks over its 19-year history in the Index, Slovenia’s economy has been largely rated “moderately free.” Further growth in economic freedom in Slovenia calls for strengthened management of public finance as well as implementation of deeper institutional reform to advance the rule of law. The judicial system remains inefficient and vulnerable to political interference, and corruption remains a cause for concern.

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Background

In March 2013, Prime Minister Alenka Bratušek formed a new center-left coalition government consisting of her Positive Slovenia Party and the Social Democrats, Civic List, and Democratic Party of Pensioners of Slovenia. Bratušek seeks to sell state-owned companies and restructure banks. Her government has opted to raise taxes rather than cut spending. Slovenia joined the European Union and NATO in 2004, adopted the euro in 2007, and joined the Organisation for Economic Co-operation and Development in 2010. Considered the gateway to the Balkans, Slovenia has excellent infrastructure and an educated workforce.

Rule of LawView Methodology

Property Rights 60.0 Create a Graph using this measurement

Freedom From Corruption 61.0 Create a Graph using this measurement

Corruption, while less extensive than in some other Central European countries, remains a problem in Slovenia, usually taking the form of conflicts of interest and contracting links between government officials and private businesses. The judicial framework remains vulnerable to political interference. Private property rights are constitutionally guaranteed, but the courts are inadequately staffed and slow.

Limited GovernmentView Methodology

The top individual income tax rate has risen to 50 percent, and the top corporate tax rate has fallen to 16 percent as the government deals with fallout from the eurozone crisis. Other taxes include a value-added tax (VAT) and a property transfer tax. The overall tax burden equals 36.8 percent of gross domestic income. Public expenditures equal 51 percent of GDP. Public debt is equivalent to about 50 percent of gross domestic income.

Regulatory EfficiencyView Methodology

The business environment is generally conducive to entrepreneurial activity, with the process for incorporating a business taking less than a week, but completing licensing requirements still takes over 150 days. Despite some progress, rigid labor regulations hamper dynamic employment growth. The small agricultural sector is highly subsidized, but the government plans to sell 15 state-owned companies, including the largest telecommunications operator.

Open MarketsView Methodology

EU members have a low 1.1 percent average tariff rate and, in general, few non-tariff barriers to trade. State-owned enterprises remain prevalent in several sectors of the economy. The financial sector remains dominated by banks. Despite some progress, privatization of state-owned financial institutions has been uneven. Equity financing remains difficult for start-ups and smaller companies. Capital markets are relatively small.

Country's Score Over Time

Bar Graph of Slovenia Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Slovenia to other economic country groups

Regional Ranking

rank country overall change
1Switzerland81.60.6
2Ireland76.20.5
3Denmark76.10.0
4Estonia75.90.6
5United Kingdom74.90.1
6The Netherlands74.20.7
7Luxembourg74.20.0
8Germany73.40.6
9Finland73.4-0.6
10Sweden73.10.2
11Lithuania730.9
12Georgia72.60.4
13Iceland72.40.3
14Austria72.40.6
15Czech Republic72.21.3
16Norway70.90.4
17Belgium69.90.7
18Armenia68.9-0.5
19Latvia68.72.2
20Macedonia68.60.4
21Cyprus67.6-1.4
22Spain67.2-0.8
23Poland671.0
24Hungary 67-0.3
25Albania66.91.7
26Slovakia66.4-2.3
27Malta66.4-1.1
28Bulgaria65.70.7
29Romania65.50.4
30Turkey64.92.0
31Montenegro63.61.0
32Portugal63.50.4
33France63.5-0.6
34Slovenia62.71.0
35Italy60.90.3
36Croatia60.4-0.9
37Serbia 59.40.8
38Bosnia and Herzegovina58.41.1
39Moldova57.31.8
40Greece55.70.3
41Russia51.90.8
42Belarus50.12.1
43Ukraine49.33.0
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