Long regarded as a model for Europe’s transition economies, this year saw Slovenia’s reputation for combining robust growth with prudent fiscal policies take a severe knock.

A marked rise in inflation – up from 2.5 per cent in 2006 to a projected 3.5 per cent for this year – and concerns about unrestrained public spending have prompted fears that the country’s economic stability is under threat and it risks falling into a “boom-and-bust” cycle.