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Banka Slovenije has been detecting positive trends since the end of last year, vice-governor Mejra Festić told the press on Tuesday. The balance of payments has been improving, as has deleveraging and household deposits.

The head of the central bank's analysis and research centre Aleš Delakorda noted with respect to the upgrade that the latest data from the Statistics Office had been much better than expected. GDP growth for the first half of the year reached 2.5%.

Already in April Banka Slovenije corrected its forecast for 2014 from a 0.7% contraction to 0.6% growth, while projecting 1.4% growth in 2015.

The 2015 forecast has now been downgraded to 1.3%, with Delakorda speaking of the end of a few elements in the second half of the year that boosted growth in the first half. The projection for 2016 is meanwhile a 1.8% expansion of GDP.

The central bank has been noticing a slight deterioration in the international environment, but manufacturing, which is synonymous with export companies, is continuing to perform well. On the other hand, services, linked mostly to the domestic demand, have been stagnating or declining.

Delakorda moreover warned that companies are investing less in equipment and machinery. Also, the general investment record is only positive because of the construction of the new generator at the TEŠ power plant.

Most confidence indicators have slowed after the fast growth recorded since mid-2013, but the positive developments on the labour maker are expected to reflect positively in domestic consumption. What is worrying however is the persistence of long-term unemployment.

Delakorda indicated that the forecast for this year could even prove conservative. As regards 2015, he highlighted the potential negative effects of the Ukraine crisis.

If the Russian sanctions are stepped up, Slovenia's GDP could be 0.6 to 1.3 percentage points lower in two years. The present limitations of exports to Russia which mostly affect fruit and vegetables should not mean major damage for Slovenia.

Looking ahead, Festić said the biggest challenges would be the financial and ownership restructuring of the real economy, a process in which the central bank plans to take an active part.

She warned that any disclosing of data on the debt of companies would seriously undermine this restructuring and lower prices in the process of privatisation.