Slovakia Approves Draft Budget Plan Targeting Deficit Reduction Below 3% by 2028

The Slovak government has approved its draft budgetary plan for 2026, reaffirming its goal to reduce the national deficit below 3 percent of GDP by 2028 and stabilize public debt, which currently stands at around 64 percent of GDP. The document outlines the government’s fiscal strategy for the next three years and will now be submitted to the European Commission for review.

Finance Minister Ladislav Kamenický said the government remains committed to fiscal consolidation despite ongoing economic pressures. Without corrective measures, the deficit would continue to expand in 2026, he warned. The plan therefore aims to lower the shortfall from about 5 percent this year to 4.1 percent of GDP next year, while keeping public spending growth within limits set by EU rules.

According to the Ministry of Finance, achieving this trajectory will require additional savings and revenue measures worth roughly 1.5 percent of GDP by 2027. These steps are intended to preserve investor confidence and create fiscal room to manage long-term challenges such as demographic ageing.

Independent analysts from the Fiscal Responsibility Council (RRZ) have largely confirmed the government’s assessment, noting that the proposed consolidation path is necessary to prevent debt from exceeding 65 percent of GDP. However, the council also cautioned that implementation will require firm political discipline and faster progress on tax and expenditure reforms.

The draft plan includes several new initiatives aimed at strengthening state revenues. Among them is a digital services tax targeting large multinational technology companies, which the ministry intends to introduce in 2026. The government also plans to gradually transfer responsibility for subsidised mortgage aid to commercial banks.

If successful, the reforms could mark Slovakia’s return to compliance with EU fiscal limits, ending the excessive deficit procedure it has faced in recent years. But economists warn that reaching the 3 percent goal by 2028 will depend on steady economic growth and the government’s ability to deliver on its promised measures.

The draft plan will now undergo evaluation by the European Commission, which is expected to issue its opinion later this year as part of the bloc’s coordinated budget oversight process.