The projected growth for this year was improved from 1.7% in spring to 2.2%, and the projection for 2017 was upgraded by 0.3 points to 2.6%. Brussels expects Slovenia's economy to expand by 2.2% in 2018.

The Commission said that Slovenia's projected growth, which is above both the eurozone and the EU average, would be propelled by exports and domestic consumption despite cuts in public spending. Brussels also expects a further shift from foreign to domestic demand.

The growth figures are more or less on a par with the September forecast by the Slovenian government macroeconomic think-tank IMAD.

Agreeing that exports and domestic consumption will be the main driver behind Slovenia's growth, IMAD believes that the dynamics of growth will be marked by public investment associated to the phasing of EU funds.

In most of Slovenia's major trade partners the growth is expected to remain at last year's level, with risks mostly associated with Brexit and growth trends in major global economies, IMAD stressed in response.

These were included in the September forecast, added the think-tank, which expects the Slovenian economy to grow by 2.3% this year and by 2.9% the next.

The Commission also predicts improvements on Slovenia's labour market and in public finances.

Meanwhile, its outlook for Slovenia's deficit remains level compared to the spring forecast. This year, it is to reach 2.4% of GDP, while it is expected to drop to 2% in 2017 and 1.5% in 2018.

Nevertheless, the Commission urged Slovenia to keep reducing the deficit even if the country has been expressing reservations about the EU methodology used to assess the fiscal effort.

The Commission also pointed to the planned rise in the public sector wage bill due to the upcoming lifting of the remaining austerity measures.

It also said that the main risks to public finances "stem from the uncertainty regarding the fiscal implications of the activities of Bank Asset Management Company and migration-related costs".

Public debt is projected to drop from 80.2% of GDP this year to 76.6% of GDP in 2018.

Slovenia's unemployment rate remains below average for the eurozone and is expected to continue to drop gradually, from 8.4% projected for this year, to 7.7% in 2017 and 7.2% in 2018.

Meanwhile, inflation is expected to pick up, from 0.1% this year to 1.9% in 2018, which compares to euro area average of 0.3% and 1.4%, respectively.