LJUBLJANA, Sept. 3 (Xinhua) -- Slovenia's inflation is projected to decline in the coming months and move closer to the European Central Bank's target of 2 percent next year, Bank of Slovenia Deputy Governor Primoz Dolenc said on Wednesday.

The country's annual inflation rate rose to 3 percent in August, the highest in 16 months. The increase was partly attributed to higher excise duties on tobacco, alcohol and fuel introduced earlier this year.

Dolenc noted that the impact of excise duties is expected to fade in the coming months, leading to lower inflation.

He added that Slovenia's overall economic outlook remains favorable, with the central bank maintaining its June forecast of 1.3 percent growth in 2025, following a gross domestic product (GDP) expansion of 1.7 percent in 2024.

Dolenc also underlined that the country's banking sector is stable, characterized by high liquidity and a low level of non-performing loans.

Dolenc has been serving as acting governor since January. ■