Unemployment, which was below the OECD average, has increased considerably

The unemployment rate has remained below the OECD average since 2001, continuously decreasing until 2008, when it reached its lowest point at 4.4% (see Figure 1.4). Unemployment has increased considerably since the crisis and was expected to peak by mid-2011 at approximately 7.5%, when activity will start picking up (based on OECD, 2011a).

Public finances, which were under control, are now showing signs of relative strain

Between 2000 and 2008, the Slovenian Government successfully kept its public finances within the Maastricht criteria, averaging a budget deficit of 2.2% of GDP per year and maintaining a level of public debt below 35% of GDP (see Figures 1.5 and 1.6). Since the global financial and economic crisis, although both the budget deficit and the level of public debt deteriorated significantly, only the fiscal balance breached the Maastricht criteria. Nevertheless, both have remained and are expected to stay below the OECD average until 2012. Despite the necessary fiscal consolidation measures currently in place, Slovenia is not expected to return to a budget deficit within the Maastricht criteria before 2013. The level of public debt will remain one of the lowest amongst OECD member countries, but is expected to increase gradually and reach 47% by 2012.

Figure 1.4. Unemployment rate, 2000-2012

Note: Harmonised unemployment rates.

Source: OECD (2011), “OECD Economic Outlook No. 89”, OECD Economic Outlook: Statistics and Projections (database), Vol. 2011/1, OECD Publishing, Paris.

Figure 1.5. General government fiscal balance, 2000-2012

Source: OECD (2011), “OECD Economic Outlook No. 89”, OECD Economic Outlook: Statistics and Projections (database), Vol. 2011/1, OECD Publishing, Paris.

Figure 1.6. General government debt, 2001-2012

Source: OECD (2011), “OECD Economic Outlook No. 89”, OECD Economic Outlook: Statistics and Projections (database), Vol. 2011/1, OECD Publishing, Paris.

Inflation has always been higher than the euro area average

Inflation has always been higher than the euro area average, especially in the early 2000s when there was strong economic growth. Considerable efforts were made to contain inflation in order to join the EMU in 2007. However, inflation picked up just before the crisis and was alarmingly high in 2008, at around 5.5% (see Figure 1.7).

 
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