Cost of living in Slovenia or officially known as the Republic of Slovenia is a country in Central Europe, between Venice and Vienna, touching the Alps and bordering the Mediterranean. Slovenia borders Italy to the west, Croatia to the south and east, Hungary to the northeast, and Austria to the north, and also has a small portion of coastline along the Adriatic Sea. It covers an area of 20,273 square kilometers or 7,827 sq mi and has a population of 2.05 million. The capital and largest city are Ljubljana.
Developed Economy of Slovenia
Economically, Slovenia has a high-income developed economy and enjoys the highest GDP per capita of the new member states in the European Union, at $ 27,654 in 2009, or 88% of the EU average. Slovenia today is a developed country that enjoys prosperity and stability, as well as a GDP per capita substantially higher than that of the other transitioning economies of Central Europe, which is approximately at the same level of South Korea, New Zealand, and Lebanon. Slovenia benefits from a well-educated and productive workforce and its political and economic institutions are vigorous and effective.
There is, however, a big difference in prosperity between Western Slovenia which includes Ljubljana, the Slovenian Littoral and Upper Carniola with a Gross Domestic Product(GDP) per capita at 106.7% of the EU average, which is at the level of certain prosperous European areas such as East Flanders, Outer London or Alsace, and South Eastern Slovenia consisting of Inner Carniola, Lower Carniola, Slovenian Styria, Slovenian Carinthia and Prekmurje, which has a GDP per capita at 72.5% of the EU average, comparable to the poorest regions of Spain or Italy, such as Extremadura or Basilicata. The economically most prosperous regions of Slovenia are Central Slovenia and the Slovenian Littoral, while the poorest are Prekmurje, the Central Sava Valley, and Slovenian Carinthia.
Although Slovenia has taken a cautious, deliberate approach to economic management and reform, with a heavy emphasis on achieving consensus before proceeding, its overall record is one of success. Slovenia’s trade is oriented towards other EU countries, mainly Germany, Austria, Italy, and France. This is the result of a wholesale reorientation of trade toward the West and the growing markets of central and Eastern Europe in the face of the collapse of its Yugoslav markets. Slovenia’s economy is highly dependent on foreign trade.
Trade equals about 120% of GDP both exports as well as imports combined. About two-thirds of Slovenia’s trade is with EU members. This high level of openness makes it extremely sensitive to economic conditions in its main trading partners and changes in its international price competitiveness. However, despite the economic slowdown in Europe in 2001–03, Slovenia maintained 3% GDP growth. Keeping labor costs in line with productivity is thus a key challenge for Slovenia’s economic well-being, and Slovenian firms have responded by specializing in mid- to high-tech manufacturing. Industry and construction comprise over one-third of GDP.
A big portion of the economy remains in state hands and foreign direct investment (FDI) in Slovenia is one of the lowest in the EU per capita. Taxes are relatively high, the labor market is seen by business interests as being inflexible, and industries are losing sales to China, India, and elsewhere.
During the first decade of the 21st century, privatization was seen in the sectors of banking, telecommunications, and public utility. Also, restrictions on foreign investment are being dismantled, and foreign direct investment (FDI) is expected to increase. Slovenia is the economic front-runner of the countries that joined the European Union in 2004. It was the first new member to adopt the euro on 1 January 2007, and it was the first new member to hold the presidency of the European Union in the first half of 2008.
During the financial crisis of the late 2000s, the Slovenian economy suffered a major setback. In 2009, the Slovenian GDP per capita shrank by 7.33%, which was the biggest fall in the European Union after the Baltic countries and Finland. Unemployment rose from 5.1% in 2008 to 11.1% in November 2010, which was above the average in the European Union, and was still rising. As of January 2011, the total national debt of Slovenia was unknown but was estimated by media to amount to 22,43 billion Euros or 63% of GDP, surpassing the European Union limit of 60% of GDP.
Moving on with the cost of living in Slovenia, it can be said that the cost of living in Slovenia is relatively cheap compared to that of the UK. Prices are highest in Ljubljana with a two-room flat costing around Euros720 to rent per month, while in Maribor it would cost around Euros 400.
There are two forms of health insurance in Slovenia, compulsory and voluntary. Compulsory health insurance is provided by the Health Insurance Institute of Slovenia (includes Cost of living in Slovenia). All employed and self-employed persons and all retired persons who receive a pension from a Slovenian insurance provider are insured under the health insurance scheme. The status of an insured person can also be obtained by the family members of the insured person if they do not have the possibility of entering the scheme on another basis. However, in the short term, emergency health treatment can be accessed with the European Health Insurance Card (EHIC).
Cost of Living in Slovenia
As per the latest indexes submitted in August 2011, the Consumer Price Index excluding rent is Euros 83.30 while the Rent Index is Euros 28.01 (Cost of living in Slovenia). The Groceries Index has been Euros 73.34 while the restaurants’ index has been Euros 66.63. Additionally, the Consumer Price Plus rent Index has been Euros 61.37 (is Cost of living in Slovenia) while the Local Purchasing Power has been Euros 61.63.