Economy of Slovenia - History

History

Although it comprised only about one-eleventh of Yugoslavia's total population, it was the most productive of the Yugoslav republics, accounting for one-fifth of its GDP and one-third of its exports. It thus gained independence in 1991 with an already relatively prosperous economy and strong market ties to the West.

Since that time, it has pursued diversification of its trade with the West and integration into Western and transatlantic institutions vigorously. Slovenia is a founding member of the World Trade Organization, joined CEFTA in 1996, and joined the European Union on 1 May 2004. In June 2004 it joined the European Exchange Rate Mechanism. The euro was introduced at the beginning of 2007 and circulated alongside the tolar until 14 January 2007. Slovenia also participates in SECI (Southeast European Cooperation Initiative), as well as in the Central European Initiative, the Royaumont Process, and the Black Sea Economic Council.

In the late 2000s economic crisis, Slovenian economy suffered a severe setback. In 2009, the Slovenian GDP per capita shrunk by −7.9 %, which was the biggest fall in the European Union after the Baltic countries and Finland. After a slow recovery from 2009 recession thanks to the export, the economy of Slovenia slid again into recession in the last quarter of 2011. This has been attributed to the fall in domestic consumption, and the slowdown in export growth. Slovenia mainly exports to the countries of the eurozone. The reasons for the decrease in domestic consumption have been multiple: the fiscal austerity, the freeze on budget expenditure in the final months of last year, the failure of the efforts to implement economic reforms, inappropriate financing, and the decrease of export. In addition, the construction industry was severely hit in 2010 and 2011.