FACTBOX: Key facts on Slovenia parliamentary election

(Reuters) - Slovenia's ruling SDS is leading the center-left opposition in most opinion polls ahead of Sunday's parliamentary election, its fifth since independence from former Yugoslavia in 1991.

Following are key facts on the five main parties and the main issues.

SLOVENIAN DEMOCRATIC PARTY (SDS) - Center-right party that led the government coalition in the past four years, headed by Prime Minister Janez Jansa. Latest polls give it an edge over main rivals. The SDS urges further liberalization of economy, claiming a robust economy is the only way to boost living standards. It also plans to increase labor flexibility and keep a restrictive fiscal policy in order to curb inflation.

SOCIAL DEMOCRATS (SD) - Main opposition party, led by European Parliament member Borut Pahor. The descendant of the former Communist Party pledges to liberalize the economy but claims Slovenia should increase lowest salaries and provide more support for the elderly, jobless and sick. Plans a coalition with fellow centre-left LDS and Zares if it wins the election.

ZARES - Third-strongest party according to opinion polls, formed last year by seven parliamentary deputies who defected from the Liberal Democrats. Headed by Gregor Golobic, a close ally of late centre-left prime minister and former president Janez Drnovsek, it urges more market competition and further cuts in public spending.

LIBERAL DEMOCRATIC PARTY (LDS) - Slovenia's strongest party for 12 years until it lost the 2004 election, after which it broke up. A newcomer to politics, lawyer Katarina Kresal, became its president last year. Pledges to boost competitiveness of local economy by increasing research and technology spending.

DEMOCRATIC PARTY OF SLOVENIAN PENSIONERS (DESUS) - Although left-of-centre, party was a junior partner in Jansa's conservative government. Demands are for higher pensions and better health care for the elderly.

MAIN ISSUES:

INFLATION: Inflation has soared since the adoption of the euro in January 2007. Year-on-year inflation in August reached 6 percent, up from 3.4 percent a year ago, and was by far the highest in the euro zone.

Jansa's government says its restrictive fiscal policy has cut the budget deficit to just 0.1 percent of gross domestic product (GDP) last year, but opposition says tighter spending and more market competition is needed to curb inflation.

PRIVATISATION: All main parties pledge gradual privatization of large state-owned companies in banking, energy and insurance. All claim the government should keep a stake in most major companies, like Slovenia's largest bank NLB.

DEFENCE: Most government parties want to boost defense spending in the next few years. Opposition parties vow to cut defense expenditure and bring home the two Slovenian soldiers who are part of international forces in Iraq.

MARKET WATCHDOGS: Jansa's SDS wants government control of public institutions like the market regulator and the competition watchdog, while the Social Democrats say they should be independent, and their heads should be appointed by the president rather than the government.

(Reporting by Marja Novak in Ljubljana)