TRANSITION, STABILIZATION AND ECONOMIC GROWTH: SLOVENIA’S EXPERIENCE

There are two important areas where Slovenian transition deviated from the patterns that had been developed at the beginning of East European transition. On one hand, the general approach to reforms was rather conservative and had more elements of gradualism than shock therapy. On the other hand, Slovenia tolerated inflation to a higher extent than this was acceptable for other EU accession countries. But both deviations had their reasons. A decisive period in which the foundations of later economic growth were set was during 1991-94. During this period crucial reforms started and the turn from recession into growth succeeded with a simultaneous decrease of infl ation to moderate level. The sequence of monetary reform and stabilization followed by import liberalization created favorable conditions for inflation decrease and economic growth. Till the end of nineteen nineties economic policy pursued some other priorities than fighting inflation at any price. Economic growth, decreasing unemployment and the maintenance of export competitiveness were among those ranked highest. As late as a couple of years before entering the EU and ERM2 disinflation had to be positioned as the first of targets.