The Slovene economy has achieved solid growth -- averaging 4.3 percent over the past eight years- while avoiding the major macroeconomic imbalances that characterized most other transition economies in the region. GDP per capita has reached the level of €16.990 (year 2002 PPS) which represents about 70% the EU average. Slovenia is among the countries with the smallest public deficit which, despite having increased in 2000, stands at just 25.8% of GDP, caused for the first time by foreign rather than domestic debt. Unemployment has been declining and stood at 6.4% in 2002 (ILO definition). However, persistently high inflation is an issue that remains to be tackled (7.5 % in 2002).

Slovenia adopted a rather gradual approach to reforms, and they have been rather slow in some sectors. This is the case especially with the baking and the insurance sectors. However, legislation adopted in 2002 paves way for increasing competition in the insurance sector, and privatisation measures in the banking sector are also contributing to the same end.

Tourism is a major industry - with its attractions ranging from spas to the stalactites and stalagmites in the 20 kilometres of underground passages in the Postojna Caves, and from the Bled and Bohinj lakes in the shadows of the Alps to the four-centuries old stud farms at Lipica - where the famous Lipizzaner horses come from. Most visitors are from Italy, Germany, and Austria.

Industry constituted 38 percent of GDP in Slovenia in 2000 - the major industries produce electrical equipment, processed food, textiles, paper and paper products, chemicals, and wood products. Agriculture accounts for 3 percent of GDP, with dairy farming and livestock dominating this sector. Major crops include cereals such as corn and wheat, potatoes, sugar beets, and fruits (particularly grapes).

Coal is the most abundant natural resource in Slovenia; other resources include lead, zinc, mercury, uranium, and silver, as well as natural gas and petroleum.

A nuclear power station at Krško - on Slovenia's side of the border, but half-owned by Croatia - produces 39% of the electricity used in Slovenia. It benefits from advanced safety applications developed under the Euratom framework programme, and has not been the focus of any safety concerns.

After attracting relatively little foreign direct investment at a level of about 1% of GDP, Slovenia has recently been winning several large foreign investments and the overall level of FDI has increased to over 2% of GDP in year 2002.

Slovenia enjoys strong trade and cooperation links with Germany, Italy, France and Austria. Main exports include machinery and transport equipment, chemicals, footwear, furniture and other household goods.

Slovenia has a high level of trade integration with the EU. About 59% Slovenia exports go to the EU and 68% of imports come from the EU.