Embed This Data
- GDP (PPP):
- $64.0 billion
- 2.9% growth
- 0.6% 5-year compound annual growth
- $31,007 per capita
- Inflation (CPI):
- FDI Inflow:
Slovenia’s record on structural reform has been uneven, and institutional weaknesses continue to undermine prospects for long-term economic development. In particular, the judicial system remains inefficient and vulnerable to political interference. Corruption continues to be perceived as widespread.
The overall regulatory framework has gradually been evolving to promote the emergence of a more vibrant private sector and encourage broad-based employment growth. Slovenia enjoys a comparatively high degree of trade freedom as tariff rates are quite low, but economic gains from trade are undercut by the lack of progress in the financial and investment areas, which are critical to sustaining open markets.
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. Heavily affected by Europe’s financial crisis, Slovenia staved off the need for international aid through a $3.5 billion package of bailouts for largely state-owned banks. Political instability has slowed the pace of privatization. Prime Minister Miro Cerar leads a center-left coalition government. His Modern Centre Party (SMC), a center-left party, won a plurality of seats in parliament in July 2014. Slovenia has been challenged by high numbers of migrants traversing the country and put tougher border restrictions in place in March 2016.
Virtually all land has a clear title. Enforcement of private property rights is slow, but improved procedures and fee reductions have made transfers of property easier. The judicial system is sound and transparent but comparatively inefficient and inadequately resourced. Corruption, less prevalent in Slovenia than in many of its neighbors, often takes the form of conflicts of interest involving contracts between government officials and private businesses.
The top individual income tax rate is 50 percent, and the top corporate tax rate is 17 percent. Other taxes include a value-added tax and a property transfer tax. The overall tax burden equals 36.6 percent of total domestic income. Government spending has amounted to 48.8 percent of total output (GDP) over the past three years, and budget deficits have averaged 7.7 percent of GDP. Public debt is equivalent to 83.3 percent of GDP.
Despite progress in streamlining the process for launching a business, other time-consuming requirements reduce the regulatory system’s efficiency. The labor market remains saddled with rigid labor regulations that hamper dynamic employment growth. To rationalize public spending, the government is privatizing several state-run companies, but the reform process has been slow and complicated.
Trade is extremely important to Slovenia’s economy; the value of exports and imports taken together equals 146 percent of GDP. The average applied tariff rate is 1.5 percent. In general, foreign and domestic investors are treated equally under the law, but the regulatory and judicial systems may impede investment. Equity financing remains difficult for start-ups and smaller companies. Capital markets are relatively underdeveloped.