The estimate is broadly in line with projections by international forecasters, which expect 2.3-2.9% growth this year.

Much like everywhere else in the region, the growth in Slovenia is expected to be driven by consumption.

Unicredit also expects both state and private investments to go up. The former due to more drawing of EU funds and the latter due to favourable financing conditions and better business results.

As the situation on the labour market improves and wages increase, private consumption is to go up despite slightly higher inflation.

Consumption exceeded anticipations already in 2016, so Unicredit upgraded its forecast for last year's growth from 1.9% to 2.4%. The upgrade is also result of high foreign demand and excellent results in tourism, Unicredit said.

The bank's analyst Dan Bucsa said on the sidelines of financial conference Euromoney in Vienna, that the balance sheets of Slovenian banks needed to be cleansed and supplied with sufficient capital, so that the banks start giving out more loans.