"Slovenia's growth has surprised on the upside in 2017, and is projected to reach 4%, which is 0.9 percentage points higher than a year before and 1.5 percentage points above the projection published in May," the EBRD says in its latest report.

According to the bank, the growth is being led by domestic demand, which benefits from "strong consumption momentum and strong recovery in investments with the start of the new EU funding cycle".

The contribution of net exports is likely to be negligible, as imports and exports should keep rising on the back of higher domestic and favourable external demand, respectively.

The EBRD sees potential risks to the projection in high corporate over-indebtedness and the slow implementation of reforms related to the business environment and privatisation.

The EBRD notably upgraded it growth forecasts for most central, southern and eastern European countries as well as central Asia and the Mediterranean in the report.

The International Monetary Fund (IMF) also upgraded its GDP growth projection for Slovenia for this year last month from 3% to 4%. Next year, the economic growth is expected to slow down to 2.5%, according to its projections.

IMAD, the government's macroeconomic forecaster, expects the economy to expand by 4.4% this year, up 0.8 points from its spring forecast, while the projection for 2018 was revised upwards by 0.7 points to 3.9%.