The latest economic forecasts for the region covered by the EBRD have Slovenia as the only country expected to remain in recession this year.

Highlighting the recent recapitalisation of Slovenian state-owned banks, the EBRD says in the report issued on Tuesday that the "adjustments in the banking sector will likely continue to weigh on private sector".

The slow crediting activity is the main reason that the recession is expected to persist in 2014.

Moreover, the EBRD expects that corporate debt restructuring will further weigh on domestic investment sentiment, while domestic consumption will remain weak.

The EBRD's forecast comes days after the IMF also slightly upgraded its outlook for Slovenia's economy this year from a 1.4% contraction to a drop in GDP of 1.1%.