Despite the upgrade, IMAD director Boštjan Vasle noted that the growth projections were still "lower than last year's growth, which reached 3%."

The autumn forecast is broadly in line with the spring projections. "Exports will remain the key engine of economic growth. We expect growth rates at the 5% level," Vasle said.

Private spending recovered in 2014 after a three-year slump and the trend is expected to proceed apace this through 2017, with growth rates of between 2% and 2.6%.

While the uptick will be driven by improvements on the labour market, Vasle noted that demographic trends were holding back the labour market recovery, as the share of those over 64 will continue to widen.

As for investments, a volatile category strongly associated with the drawing of EU funds, IMAD notes that private investments are still flat while public investments will grow this year and decline in 2016.

Internationally, the main downside risk in the forecast is the uncertainty driven by the cooling of emerging economies such as China's. Domestically, the forecast hinges on how fiscal consolidation will proceed.

Vasle also pointed to a wide gap between investments and savings: in the years preceding the crisis investments surged, in the past two years the pendulum has swung towards savings.

While the result is a positive balance of payments, which in itself is good news, Vasle pointed out that there was a "significant imbalance".

"This [imbalance] conceals the true problem: the non-functioning flows between banks and companies, resulting in low investments and higher savings," he said.

IMAD also expects the period of low price growth to continue on the back of this year's persistent deflation. This year the annual inflation rate is projected at 0.1%, growing to 1.2% next year and 1.6% in 2017.