After steady convergence towards the European Union average in terms of GDP per capita, the Slovenian economy has been severely hit by the global crisis. Gross domestic product (GDP) fell by close to 8% in 2009, among the deepest declines in the OECD, but is poised to grow modestly in 2010 before growth picks up to 2-3% in 2011-12. The sharp drop in liquidity in the midst of the crisis required significant support to the financial system from the government and the European Central Bank. The financial health of households and firms has been weakened by reduced asset prices, incomes and the availability of credit. Although exports have rebounded strongly since mid-2009, domestic demand has been held back by the weak labour market and ongoing deleveraging by financial institutions and businesses. Needed fiscal consolidation will also constrain growth in the short term.