The US ratings agency expects the country's economic growth to slow down to 1.9% in 2016 and remain slightly above 2% in the medium term.

The rating is supported by "Slovenia's relatively high value-added economy, which underpins a high level of income per capita, and membership of the EU and eurozone," Fitch said in a press release issued on its web site on Friday.

The rating is constrained by high government debt and a fragile banking sector, while the positive outlook reflects the agency's forecast that fiscal tightening will allow government debt to decline. Government intervention has also helped improve banks' capacity to resist shocks.

Fitch estimates the general government deficit fell to 2.9% of GDP in 2015 from 4.9% in 2014, and expects it to be reduced to 2.5% in 2016 and 2.2% in 2017, primarily as a result of stronger economic conditions that will support revenues.

The general government debt is estimated to have reached 82.7% of GDP in 2015, up from 80.8% in 2014. Fitch expects it to decline to 80.1% of GDP in 2016 and 72.9% by 2022 assuming some fiscal tightening, real GDP growth above 2% and a gradual recovery in inflation. Debt reduction could be accelerated by privatisation.

Fitch also expects bank credit to the private sector to stabilise in 2016 and start growing in 2017, after contracting by 6% in 2015.

The agency "does not currently anticipate developments with a material likelihood of leading to a downgrade". However, it warns that the failure to reduce government debt, weak economic growth performance or persistent deflation could lead to a negative rating action.