Trade risks and geopolitical factors will cause a one-year delay in Slovakia’s aim of reducing its budget deficit below the EU-mandated 3% of gross domestic product limit, the Finance Ministry said.
Slovakia has one of the euro zone’s highest fiscal deficits and entered the European Union’s excessive deficit procedure last year.
The leftist-nationalist government of Prime Minister Robert Fico has sought to gradually cut the gap in order to halt rising debt levels while still maintaining spending on extra pension payments or on keeping energy prices low.
The government had previously expected to get the budget deficit below 3% of GDP by 2027, the final year of its term, but the ministry said that could now be achieved in 2028.
In materials posted on the government’s website before a regular meeting on Wednesday, the ministry said economic growth was expected to be below 2% in the coming years with growing uncertainty around global trade amid U.S. tariffs and German industry stagnation.
EU funds and rising wages and household consumption should give a buoying effect, it said.
The government has implemented a 2.7 billion euro package of tax rises and other measures to cut the deficit to 4.7% of GDP in 2025, from 5.8% last year.
The fiscal measures included raising the main value-added tax rate and introducing an unusual tax on financial transactions by businesses, which was inspired by neighbouring Hungary.
The ministry said consolidation measures worth 1.7 billion euros in 2026 – more than the earlier expected 1 billion – and up to 3.5 billion euros in 2027 were needed to keep reduction plans on track. That will also help meet rising expenditure, including defence spending, it said.
Debt should reach 63% of GDP by 2027 before starting to decline, the ministry said.