The IMF expects Slovenia's economy to grow by 1.9% this year and by 1.7% in 2016.

The fund estimates that 2014 growth reached 2.6% of GDP, a 0.1 percentage point improvement on the December forecast.

Slovenia is recovering following recapitalization of the major banks by the state and with the help of strong exports and EU-funded public investment, but the GDP is below pre-crisis level and unemployment remains high, the IMF said.

Other risks weighing on the outlook include insufficient reform implementation and weaker-than-expected external demand.

Key policy challenges include strengthening the health of the banking sector to enable it to support the economy, accelerating corporate restructuring to address the large debt overhang and reduce the role of the state in the economy, putting public finances on a sustainable path and ambitious structural reforms.

The IMF called for a sale of state-owned banks and for stepping up privatization efforts, while avoiding fire sales.

Mission Chief for Slovenia Delia Velculescu argued for the STA that governance problems related to political interference in decision making in the banks and corporate sector "were at the root of the crisis".

"By allowing the corporate sector to borrow beyond its means, they led to large bank losses that had to be then covered by the Slovenian taxpayer. Privatization can sever the link between the state and the banks and corporations and limit such taxpayer costs in the future," she said.

The fund also stressed the need to make full use of the Bank Asset Management Company (BAMC), with Velculescu saying that "BAMC can play a leading role in the corporate restructuring process".

"Additional transfers of non-performing loans to BAMC would achieve economies of scale and better centralization, while allowing the banks to focus on restoring credit to viable companies."

The fund moreover highlighted the importance of pension reform to address looming demographic pressures; tax reforms, including revamping the property tax system; and efforts to increase efficiency in health, education, and the public administration.

The IMF expects Slovenia's exports to increase by 4.1% this year and by 3.8% in 2016. Consumer prices are expected to decrease by 0.2% in 2015, while 0.8% inflation is expected in 2016.

Domestic demand is forecast to improve by 1% this year and by 1.8% next year, while the projection for private consumption is a 0.8% rise in 2015 and 1.6% in 2016. Public consumption is expected to contract by 0.6% this year and then recover by 0.7% next year.

"Slovenia has overcome an unprecedented crisis and is now growing again. This is something to be proud of, and reflects the sacrifices and perseverance of the Slovenian people. But risks remain significant, and the reform agenda is far from finished," Velculescu noted.

"Although the urgency of the crisis is now diminished, keeping a foot on the reform acceleration pedal remains critical. Slovenia already faces enough risks without adding that of complacency to the mix," she added.

She advised the government of Miro Cerar to "seize the opportunity of the recovery to make good on its commitments and take bold steps to address remaining vulnerabilities and put Slovenia on a sustainable growth path".