Assessment and Recommendations

Abstract

Overall, Slovenia’s regions have experienced strong growth since the mid-1990s. While there has been some increase in inter-regional disparities in both growth performance and levels of GDP per capita, the increase in disparities was driven largely by the dynamism of the capital region, and even the worst-performing regions have been growing faster than the OECD average. The widening of interregional disparities during the period of strong growth before 2009 was in any case typical of economies in transition, and inter-regional disparities remain relatively low by OECD standards. Nevertheless, two regions stand out as chronic under-performers, with per capita GDP levels falling further and further below the national average. They represent a cause for concern, as their poor performance could, unless reversed, impose significant long-term costs in the future. While the recent crisis hit Slovenia hard, its aggregate impact on labour markets has been in line with the OECD average; the unemployment rate rose from 4.4% in 2008 to 5.9% in 2009. However, the spike in unemployment was geographically quite concentrated: more than half of job losses (60%) occurred in only two of Slovenia’s twelve regions.