* Slovenia narrowly avoided EU/IMF bailout in December
* All eyes on sale of state assets
* PM challenges forecasts of further GDP contraction
By Almir Demirovic
LJUBLJANA, Jan 27 Slovenia's sickly economy can grow this year, Prime Minister Alenka Bratusek said, contradicting most expectations of a further contraction following a government bank rescue.
In comments emailed to Reuters, Bratusek said that after narrowly avoiding a bailout by its European peers in December, her government had turned its attentions to reviving the economy.
"I know some forecasts for Slovenia still do not expect economic growth, but forecasts change," Bratusek wrote in response to questions over the weekend.
"Already last year in the third and fourth quarters we did not see a decline in GDP (gross domestic product). This data gives me hope that we will have minimal growth this year."
Responding to market concern about possible backsliding on privatisation, Bratusek said there was a "detailed timetable" for the sale of 14 companies that had not yet been made public.
The IMF said this month it expects Slovenia's national output to shrink 1.1 percent in 2014, less than previously feared, as the government tries to cut spending and remake an economy still 50 percent in state hands.
The government's own macroeconomic institute is predicting a 0.8 percent decline.
The recession, however, is easing, to a 0.3 percent contraction quarter-on-quarter from April to June and flat output in the third quarter. Fourth quarter data has yet to be published.
Bratusek's government has come to the rescue of Slovenia's mainly state-owned banks, ring-fencing billions of euros in bad loans and plugging the difference with cash injections to keep them afloat.
It plans to sell at least a dozen state-controlled companies, including No.2 lender Nova KBM, national airline Adria Airways, Ljubljana international airport and Slovenia Telekom.
But Bratusek faces resistance from some in her disparate coalition to the sale of prized state assets that for years have been considered sacrosanct in Slovenia, which unlike the rest of ex-communist Eastern Europe resisted an influx of Western capital after the end of the Cold War.
In the past week, rating agencies Standard & Poor's and Moody's have affirmed Slovenia's sovereign ratings after a run of downgrades last year. Moody's lifted its outlook for the country from negative to stable, though both agencies warned of the need to carry out promised reforms.
"Transparency is the key word in privatisation, but disclosing certain information could affect the price that we expect from the sale," Bratusek wrote of the privatisation plans.
"We do not want to sell to the first bidder who comes along. We will be guided by the strategic interest of the partner and the highest possible price. If it looks like the buyer would purchase a company just to sell it piecemeal or destroy it, we won't sell it."
When the global economic downturn struck, Slovenia's vital exports hit a wall, driving the economy into two recessions since 2009 and exposing a system of crony capitalism that left banks vulnerable to spiralling toxic debt.
"We are aware that after the first fire-fighting measures, our job is only just beginning," Bratusek said.
"Slovenia is not completely out of the financial/economic crisis and now we must make sure we attain the goals we set for ourselves." (Additional reporting by Zoran Radosavljevic in ZAGREB; Writing by Matt Robinson; Editing by Ruth Pitchford)