Like most of the eurozone, Slovenia faces continuing economic weakness heading into the year. The European Commission has forecast that the Slovenian economy will shrink by 1.6% this year, while the forecast by the Organisation for Economic Cooperation and Development (OECD) is even more gloomy, predicting a contraction of 2.1%.

The Slovenian government' main economic think-tank, the Institute of Macroeconomic Analyses and Development, expects that an upturn is possible by next year, but this will require further structural measures.

In addition to export weakness caused by the recession in the eurozone, its key trading partner, Slovenia also faces a drop in domestic consumption and further deterioration in the labour market.

The Employment Institute forecasts that the number of unemployed could rise from around 112,000 at the end of 2012 to 117,000 by the end of 2013.

The government will push ahead with efforts to reduce the budget deficit to below 3% of GDP by the end of the year, a pledge the country gave to the EU in 2009.

After successfully implementing pension reform, the government is expected to go about finalising other key reform packages aimed at increasing flexibility of labour legislation and overhauling public health care and the judiciary.

Reform of the public sector wage system is also on the table and negotiations on this issue will likely be the biggest point of contention between the trade unions and the government.

After pushing through its proposal for a bad bank as a means of shoring up the ailing financial sector, the government will be faced with the task of implementing the new bank and managing the bad investments.

Helping the government manage all state assets and launch a new round of privatisation will be the new sovereign holding, which was established with a law that was severely criticised by the opposition and will likely be a continued source of dispute.

In the political arena, the debate will continue on a set of proposals for overhauling the political system put forward by the senior coalition Democrats (SDS), as will efforts to amend elements of the Constitution, especially the framework governing referenda.

New President Borut Pahor will be tasked with making nominations to several key positions, as the terms of the human rights ombudsman, the central bank governor and the president of the Court of Audits end.

In the EU arena, Slovenia will contribute to efforts to reshape the bloc which has been hit hard by the debt crisis by participating in negotiations on the second and third pillars of a banking union.

The country will also try to secure the greatest possible chunk of development funds as part of talks on the 2014-2020 EU budget framework.

Relations with Croatia will continue to dominate foreign policy, with the countries still facing deadlock over the repayment of deposits held in a Croatian subsidiary of the defunct Slovenian bank LB.

A failure to find agreement could present a major hurdle as Slovenia prepares to ratify Croatia's EU Accession Treaty, a precondition for Croatia to achieve its goal of joining the block on 1 July 2013.

The two countries will also be involved in ongoing efforts by an arbitral tribunal to settle their border dispute. Arbitration memoranda are due to be filed by the countries in February, whereupon the two countries will have until November to respond to the statements of the other side.

Slovenia will again host a major sports event, as the European Basketball Championships will take place in four cities in September.

Major events and key anniversaries in 2013:

JANUARY

1st - LJUBLJANA - A new agency, Spirit, bringing together the Public Agency for Entrepreneurship and Foreign Investments, the Tourist Board and the Public Agency for Technological Development will be launched.

1st - LJUBLJANA - A section of the 74th Motorised Battalion will assume six-month duties in NATO's rapid reaction force.

2nd - LJUBLJANA - In line with the government's austerity act of May 2012, the 2nd of January will not be a public holiday.

12th - LJUBLJANA - The 10th anniversary of the death of Jože Pučnik, a leading dissident in Communist times and the first leader of what is now the Democratic Party (SDS).

FEBRUARY

1st - LJUBLJANA - Ten years will have passed since Slovenia opened its real estate market to EU citizens.

10th - LJUBLJANA - The first anniversary of the Janez Janša government.

11st - LJUBLJANA/ZAGREB - The deadline for Slovenia and Croatia to file memoranda in support of their case to the arbitral tribunal deciding on their border dispute.

22nd - LJUBLJANA - The six-year term of Human Rights Ombudsman Zdenka Čebašek Travnik ends.

23rd - LJUBLJANA - The fifth anniversary of the death of long-time prime minister and former president Janez Drnovšek.

MARCH

1st - LJUBLJANA - The coalition Pensioners' Party (DeSUS) will hold an election congress at which Karl Erjavec will seek a new term as the party's leader.

2nd - LJUBLJANA - The coalition People's Party (SLS) will elect a new leader at its congress.

23rd - LJUBLJANA - The tenth anniversary of referenda at which Slovenians endorsed membership of the EU and NATO.

APRIL

16th - LJUBLJANA - The tenth anniversary since Slovenia signed the EU Accession Treaty.

MAY

LJUBLJANA - The ruling coalition Democrats (SDS) are expected to hold a party congress.

14th - LJUBLJANA - Slovenia will mark 20 years since it joined the Council of Europe.

JUNE

1st - LJUBLJANA - The term of Court of Audits President Igor Šoltes will end.

26th - LJUBLJANA - The deadline for Slovenia to prepare a system for compensating the erased citizens in line with a ruling by the European Court of Human Rights.

JULY

15th - LJUBLJANA - The term of Banka Slovenije Governor Marko Kranjec will end.

AUGUST

26th - TRIESTE, Italy - Slovenian minority writer Boris Pahor will celebrate his centenary.

SEPTEMBER

2nd - LJUBLJANA - The tenth anniversary of the abolishment of compulsory military service.

4th - LJUBLJANA - The European Basketball Championships will start, running until 22 September.

OCTOBER

25th - LJUBLJANA - The EU directive on cross-border healthcare will take effect, obligating Slovenia and the other members to provide health care service to EU citizens on an equal basis.

NOVEMBER

11th - LJUBLJANA/ZAGREB - The deadline for Slovenia and Croatia to respond to each other's memoranda on border arbitration will pass.

DECEMBER

31st - LJUBLJANA - It will be five years since the Islamic Community in Slovenia acquired land for the first mosque in Slovenia.