S&P expects Slovenia's public debt to fall below 80% of GDP given the robust GDP growth, which is underpinned by strong domestic consumption and healthy export growth.

The financial sector is seen as recovering as well and will help support future growth, according to the ratings upgrade issued on Friday.

The outlook is stable instead of positive due to downside risks such as a slowdown in the reform and privatisation drive, a potential fiscal slip-up, and external risks to growth.

The Finance Ministry said the upgrade was a confirmation that Slovenia is on the right track.

"It is very important to stick to the path we set out on ... We have to do everything to make sure the trend of improving ratings does not stop," Finance Minister Mateja Vraničar Erman was quoted as saying.