The rating agency said in a press release on Friday that progress has been made in fiscal consolidation and the policy-making environment, which increases the likelihood that further economic and fiscal policy reform will be implemented.

The other main reason on which Moody's based its upgrade is the stabilization of the banking sector, which reduces the risk of further liabilities on the government's balance sheet.

Moody's also expects Slovenia's policies in support of these positive developments to remain in place. It moreover expects that the country's debt burden would slowly start to decline from 2015 onwards.

Its analysts believe that the Slovenian government would bring the budget deficit below 3% of GDP this year and achieve a primary surplus, in line with the requirements agreed with the European Commission.

Moody's also said Slovenia's rating could be further upgraded if the country makes progress in privatisation and fiscal reforms, and if signs would point to an improvement of governance or competitiveness in the corporate sector.

The Finance Ministry responded on Saturday by saying that Moody's upgrade means that all three rating agencies place Slovenia among "low-risk countries".

It added in a press release that following the ECB's announcement of a plan to buy state bonds, yield on Slovenia's ten-year bond dropped below Italy's ten-year bonds to 1.439% on Friday.

Last month, Standard&Poor's upgraded Slovenia's rating to A- stable, whereas Fitch's last available rating from May 2014 is BBB+ with stable outlook.