• CBR has increased its estimate of the 2026 GG deficit. Compared with the September forecast, the expected deficit has increased by EUR 217 million mainly due to higher estimated defense investment related to deliveries of military equipment.
• According to the CBR, the 2026 deficit could reach 4.4 % of GDP (EUR 6.4 billion), if the government does not adopt additional measures. This represents a negative deviation of 0.3 % of GDP (EUR 291 million) from the approved budget amounts, indicating a medium level of risk that the public deficit will exceed the government’s objective.
• A significant revision of defense investment reflects the latest information published in the actual budget.
• The updated data worsen the GG deficit estimate in absolute terms. However, this negative impact is partly offset by an upward revision of nominal GDP in the Statistical Office of the Slovak Republic’s autumn notification, resulting in a smaller increase in the deficit-to-GDP ratio.
• Compared to the government’s estimate published in the approved budget for years 2027 to 2029, the level of the CBR deficit forecast is almost identical (the difference amounts to EUR 62 million, as the CBR forecasting a higher deficit than the government).
• The most significant negative deviation in the CBR forecast compared to the budget comes from higher expenditures of local governments, amounting to 0.3 % of GDP (EUR 452 million). These expenditures are underestimated in the budget, reflecting this year’s local elections.

Príspevok Defense deliveries increase the deficit estimate; the budget target may be exceeded by 0.3 % of GDP (EUR 393 million) (Budgetary Traffic Light October 2026) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

Príspevok Evaluation of the General Government Budget Proposal for 2027-2029 je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

• CBR has decreased its estimate of the 2026 GG deficit. Compared with the August forecast, the expected deficit has decreased by EUR 133 million mainly due to higher estimated tax revenues and lower investment expenditures in defense.
• According to the CBR, the 2026 deficit could reach 4.3 % of GDP (EUR 6.1 billion), if the government does not adopt additional measures. This represents a negative deviation of 0.2 % of GDP (EUR 291 million) from the approved budget amounts, indicating a medium level of risk that the public deficit will exceed the government’s objective.
• Compared to the government’s estimate published in a mid-August report on expected budget outcome, the level of the CBR deficit forecast is lower by 0.1 % of GDP (EUR 176 million).
• The most significant negative deviation in the CBR forecast compared to the budget comes from higher expenditures of local governments, amounting to 0.4 % of GDP (EUR 498 million). These expenditures are underestimated in the budget, reflecting this year’s local elections. The CBR identifies further risks relative to the budget in lower taxes and social and healthcare contributions, particularly in lower expected revenue from CIT and VAT.
• On the other hand, the most significant positive impact on the GG balance compared to the budget comes from the better financial performance of other GG entities, mainly public transport companies and Slovak Railway Company.

Príspevok Higher estimated tax revenues reduce deficit to EUR 6.1 bn.; the budget target may be exceeded by 0.2 % of GDP (EUR 291 million) (Budgetary Traffic Light September 2026) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

• CBR has slightly increased its estimate of the 2026 GG deficit. Compared with the July forecast, the expected deficit has slightly increased by EUR 20 million mainly due to higher estimated expenditure on energy support.
• According to the CBR, the 2026 deficit could reach 4.4 % of GDP (EUR 6.3 billion), if the government does not adopt additional measures. This represents a negative deviation of 0.3 % of GDP (EUR 409 million) from the approved budget amounts, indicating a medium level of risk that the public deficit will exceed the government’s objective.
• Compared to the government’s estimate published in a mid-August report on expected budget outcome, the level of the CBR deficit forecast is almost identical (the difference amounts to EUR 43 million, as the CBR forecasting a lower deficit than the government).
• The most significant negative deviation in the CBR forecast compared to the budget comes from higher expenditures of local governments, amounting to 0.4 % of GDP (EUR 501 million). These expenditures are underestimated in the budget, reflecting this year’s local elections. The CBR identifies further risks relative to the budget in lower taxes and social and healthcare contributions, particularly in lower expected revenue from CIT and VAT.
• On the other hand, the most significant positive impact on the GG balance compared to the budget comes from the better financial performance of other GG entities, mainly public transport companies and Slovak Railway Company.

Príspevok The estimated deficit for 2026 remains almost unchanged; the budget target may be exceeded by 0.3 % of GDP (EUR 409 million) (Budgetary Traffic Light August 2026) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

The Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules annually assesses, by 31 August, compliance with the rules arising from the constitutional Fiscal Responsibility Act^[1] in the preceding year. The assessment also takes into account events occurring in the current year up to the report’s cut-off date, if they are relevant to assessing compliance with the rules or to the completeness of the assessment. The report focuses in particular on the development of the long-term sustainability of public finances, compliance with the debt limit and the public expenditure ceiling, the rules applicable to local government, and compliance with fiscal transparency requirements.

Long-term sustainability of public finances

The key objective of the fiscal responsibility rules is to ensure the long-term sustainability of public finances. Safeguarding the long-term sustainability of Slovakia’s public finances, with due regard to the principles of transparency and efficiency in the use of public funds, is enshrined in the Constitution of the Slovak Republic[2].

In its evaluation[3], the Council for Budget Responsibility (CBR, or Slovak abbreviation RRZ) concluded that the long-term sustainability of public finances was not achieved in 2025. Under a no-policy-change scenario, the long-term sustainability indicator reached 5.5% of GDP, placing public finances in the high-risk zone. Despite completing three rounds of consolidation measures, the indicator did not improve significantly. Its development was adversely affected by a less favourable macroeconomic environment. A more substantial improvement was also impeded by the inappropriate composition of the consolidation packages, which weakened the economy’s competitiveness[4], the adoption of new expenditure measures, and the temporary nature of some consolidation measures.

Without additional consolidation measures, the CBR estimates[5] that the deficit will increase from 4.4% of GDP in 2026 to 5.7% of GDP in 2029. Rising interest expenditure, higher defence spending and new expenditure policies are contributing to the worsening of the balance. From 2028 onwards, the expiry of temporarily increased taxes and social contributions will also have an effect. Under this scenario, gross debt would increase by 12.6 percentage points, from 61.4% of GDP at the end of 2025 to 74.0% of GDP in 2029.

Rising debt not only worsens the long-term sustainability of public finances, but also reduces their capacity to absorb unexpected shocks[6]. According to CBR estimates, the safe level of gross debt for Slovakia does not exceed 50% of GDP and, as a result of population ageing, will decline further towards 40% of GDP in the coming decades. At 61.4% of GDP, debt is therefore already above the safe range. Slovakia’s fiscal space for absorbing adverse shocks has been exhausted and its public finances are in the fiscal-stress zone. Whereas Slovakia was able to respond to past crises partly by using the fiscal space available at the time, its current absence means that even ordinary shocks may, because of the need to stabilise debt, lead to the adoption of procyclical measures with an adverse impact on households’ living standards and the economy as a whole. At the same time, Slovakia’s vulnerability to further shocks is increasing substantially. This will initially be reflected in higher financing costs, including through a higher risk premium.

Given the persistently poor state of public finances, the government should present further ambitious measures to improve their sustainability as soon as possible. In spring of 2026[7], the government significantly relaxed its own budgetary objectives and currently plans a deficit of 4.2% of GDP in 2027, followed by only a marginal reduction to 4.1% of GDP in 2028[8]. It has thus postponed reducing the deficit below 3% of GDP and stabilising debt, as required both by the government manifesto and the European fiscal rules, until after the current electoral term.

Even meeting these substantially relaxed objectives will, according to the CBR, require measures amounting to €1.2 billion (0.9% of GDP) in the 2027 election year and a further €1.0 billion (0.5% of GDP) in 2028. If the government were to meet its 2027 objective through measures that permanently improve the general government balance, the long-term sustainability indicator could move to a level between the medium- and high-risk zones[9].

Postponing consolidation without a clear strategy increases both costs and uncertainty. Persistently high deficits will increase debt and interest expenditure, while the absence of a credible medium-term plan of permanent measures reduces the predictability of fiscal policy and creates risks and uncertainty that weaken the incentives of firms and households to invest. The longer consolidation is postponed, the deeper will public finances move into the fiscal-stress zone and the less room the country will have to protect the economy and households during the next crisis. Adverse shocks are not exceptional: the pandemic, the energy and inflation crises, and the geopolitical tensions of the past decade confirm that they should be regarded as the norm. In an extreme case, the absence of a timely and systematic response could even lead to a loss of Slovakia’s fiscal sovereignty – a situation in which fiscal policy is effectively constrained by financial-market or external-financing conditions.

Formal compliance with insufficiently stringent European rules does not guarantee sound public finances. If the entire scope for net expenditure growth under the binding European trajectory were used, the deficit could reach as much as 5.4% of GDP and gross debt 73.3% of GDP in 2028. At the same time, the European expenditure rule could remain formally complied with until 2028 even if consolidation did not continue. The CBR has therefore long warned of the inappropriate calibration of the European rule for Slovakia and to the need for a substantially more ambitious domestic consolidation plan.

Fiscal responsibility rules

Safeguarding long-term sustainability is a constitutional value that all public authorities are required to protect. A fiscal position that is unsustainable in the long term may in future jeopardise the state’s ability to ensure the proper protection of fundamental rights, especially those whose protection depends on public finances[10].

To safeguard this constitutional value, the constitutional act lays down fiscal responsibility rules. Expenditure ceilings should be the main operational and countercyclical instrument of budget management. The general government debt limit, the so-called debt brake, is an ultimate corrective mechanism intended to prevent debt from remaining at excessive levels over the long term. However, several CBR recommendations to strengthen these rules have remained unimplemented for a prolonged period.

According to the intention of the authors of the constitutional act, measures associated with exceeding the sanction brackets were to reduce debt to a safe level. However, practice to this date shows that successive governments have repeatedly circumvented the obligations arising from the debt-brake sanction brackets, complied with them only formally, or failed to comply with them altogether[11]. Such conduct weakens the corrective function of the debt brake and disregards the purpose of the constitutional act, namely to achieve the long-term sustainability of the Slovak Republic’s public finances. The government’s current fiscal strategy likewise fails to create the conditions either for stabilising debt or for fulfilling the fundamental purpose of the constitutional act.

After more than a decade of the constitutional act being in force, sufficient evidence is available on how the individual rules operate and are applied in practice. The current level of debt, combined with a worsened economic outlook, also highlights the need for corrective mechanisms to operate in a timely and gradual manner and to avoid the need for sudden, large-scale fiscal-policy interventions. These circumstances do not, however, in any way justify the approach taken to date by governments and parliament towards compliance with the constitutional principles and fiscal responsibility rules. Their inconsistent application has itself been one of the main causes of the deterioration in public finances. The essential prerequisite for effectively safeguarding long-term sustainability is therefore, above all, a change in the approach of governments and parliament to the fiscal responsibility rules. Weakening the effect of the rules in force is not the solution.

In the current situation, the CBR encourages the amendment of the constitutional act. The amendment should build on the act’s original objectives and intentions and supplement the existing framework with elements enabling more effective management of public finances with a smaller potential adverse impact on the economy. A key element should be to re-link the national public expenditure ceiling to the long-term sustainability indicator, as under the original national framework in force until 31 July 2024. Such a reform requires broad political consensus. However, neither clarifying the act nor tightening sanctions will suffice without a clear and verifiable mechanism ensuring that the relevant obligations are fulfilled properly and on time.

General government debt limit

The debt-to-GDP ratio remained in the highest, fifth sanction bracket[12] of the debt-brake mechanism in 2024 and 2025. Based on data published by Eurostat in October 2025, debt stood at 59.7% of GDP at the end of 2024, while according to preliminary data[13] released in April 2026 it reached 61.4% of GDP at the end of 2025.

As the 24-month exemption from the application of the stricter sanctions under the constitutional act[14] expired on 22 November 2025, until and including 22 November 2025, the debt level recorded for 2024 was subject to the sanctions triggered by exceeding the first and second sanction brackets under the constitutional Fiscal Responsibility Act, while from 23 November 2025 it was subject to the sanctions triggered by exceeding all five sanction brackets under the constitutional Fiscal Responsibility Act[15] (Table 1).

The debt level in 2025 is associated with the sanctions triggered by exceeding all five sanction brackets under the constitutional Fiscal Responsibility Act (Table 2). The debt level will be confirmed in October 2026, while compliance with some sanctions can only be assessed after the end of 2026.

Although general government gross debt has remained continuously in the highest debt-brake sanction bracket since 2020, application of the sanctions in recent years has often remained merely formal[16] and has had only a minimal effect on reducing debt. In some cases, the government failed to comply with its statutory obligations or acted in a manner that circumvented the purpose of the constitutional act:

• In 2025, and so far in 2026, the government did not submit a proposal for measures to reduce the debt to the National Council of the Slovak Republic. The government should have submitted the proposal without undue delay[17] after the debt level was published in April. As it failed to do so, the unlawful situation persists.
• The government did not ask the National Council of the Slovak Republic for a vote of confidence without delay. The exemption from the strictest sanctions ended on 22 November 2025, and the government should therefore have asked for a vote of confidence immediately after that date. It did so only on 17 June 2026, almost seven months later and on the day the judgment of the Constitutional Court of the Slovak Republic was adopted[18]. The National Council passed the confidence vote on 18 June 2026.
• The government submitted the 2026-2028 general government budget proposal and the National Council approved it before the 24-month exemption expired. It thereby avoided the application of the obligation to submit a balanced or surplus budget proposal with no year-on-year increase in expenditure, which would have applied after the exemption expired[19].
• The Ministry of Finance recommended a similar approach to local governments[20] when approving their budgets for 2026. In the CBR’s view, however, approval of those budgets before the exemption expired did not mean that the sanctions ceased to apply to them after 22 November 2025. The CBR pointed out that local government budgets which failed to meet the requirements of the constitutional act came into conflict with its provisions once the exemption expired. Local governments should therefore have brought their budgets into line with the requirements of the constitutional act from 23 November 2025[21]. This is because the constitutional act establishes a stricter regime for local government budgets than for the budget proposal submitted by the government to the National Council.
• The CBR regards the announced use of the 36-month exemption from the strictest sanctions as a further risk of circumvention of the rules. In May 2026, the prime minister stated that the government would not prepare a deficit-free general government budget proposal for 2027 because, in his view, the conditions for this exemption had been met. Based on the information published to date, however, the CBR considers that the conditions for applying the 36-month exemption have not been met.

The CBR emphasises that, while debt-brake sanctions apply primarily to the government, ultimate responsibility for compliance with them and for the long-term sustainability of public finances lies with the National Council of the Slovak Republic. If parliament allows the government not to submit measures to reduce debt (or to submit them only as a purely formal exercise, as in the past), or if parliament expresses confidence in the government without the government demonstrating a credible strategy at least to stabilise debt, parliament thereby assumes responsibility for the constitutionally required safeguarding of the long-term sustainability of the state’s public finances.

Public expenditure ceilings

The constitutional act requires the introduction of binding public expenditure ceilings. Since 1 August 2024, the national ceiling has been linked to the net expenditure growth path under the European fiscal rules. According to the CBR, this change weakened the original framework because it does not take account of the long-term sustainability of public finances over a 50-year horizon and does not ensure full consistency between the national and European rules.

The insufficiently stringent expenditure ceilings did not create pressure for a year-on-year reduction in the deficit in line with their objectives; instead, they formally permitted a substantial increase in the deficit in 2025.

Both ceilings were complied with by a wide margin in 2025. After taking the defence escape clause into account, cumulative net expenditure growth in 2024 and 2025 reached 3.3%, whereas the European trajectory allowed growth of up to 10.3%. The national ceiling of €61.1 billion was complied with by a margin of €1.4 billion. This large margin, however, points to the rules being set too loosely: if the European ceiling had been used in full, the deficit could have risen to as much as 7.3% of GDP in 2025[22], or to 6.0% of GDP if the national ceiling had been used in full. This also illustrates the inconsistency between the European and national fiscal frameworks.

The current calibration of the ceilings does not exert sufficient pressure to achieve sustainable public finances. In the CBR’s view, the European rule could remain formally complied with until 2028 even without further consolidation measures. If the permitted expenditure path were used in full, the deficit would reach as much as 5.4% of GDP and gross debt 73.3% of GDP in 2028. In their current form, the expenditure ceilings therefore fail to ensure the necessary deficit reduction, debt stabilisation or achievement of long-term sustainability and allow the necessary consolidation to be postponed to later years.

Specific provisions for local government

The rules applicable to local government are intended to separate local governments’ responsibility for their own solvency from that of the state, ensure state funding for their new tasks, and limit excessive local government indebtedness. For these reasons, three areas are assessed: (1) state participation in ensuring local government solvency; (2) financial coverage of new tasks and competences; and (3) compliance with the debt limit.

• Based on the information obtained, it can be concluded that in 2025 the state did not participate financially in ensuring local government solvency, which is consistent with the requirement of the constitutional act to ensure budgetary discipline and a clear allocation of responsibility to local governments for the exercise of their powers. During 2025, the government did not provide local governments with any new repayable financial assistance from the state’s financial assets. However, it improved their financial position through earmarked grants and the partial remission of assistance provided earlier[23]. The rules for providing repayable financial assistance from the state’s financial assets should be amended to prevent the selective favouring of local governments and the use of such assistance to avert their insolvency.
• In the CBR’s view, the Social Services Act, as amended in 2025, assigned new tasks within the own competences of self-governing regions without full financial coverage from the state. The obligation to fund non-public providers of facilities for older people and residential care facilities is being transferred gradually from municipalities to self-governing regions from 1 July 2026 and 1 January 2027. After taking into account the increase in the share of self-governing regions in personal income-tax revenue from 28.6% to 29.3% from 1 January 2027, the CBR estimates the unfunded impact on their budgets at approximately €18 million per year from 2027[24]^, [25].

Changes to local government funding should be subject to a proper consultation procedure, their budgetary impacts should be quantified separately and subsequently monitored. New tasks within local governments’ own competences must be adequately funded, while the state must cover the costs of delegated state-administration tasks.

• All self-governing regions complied with the debt limit[26], but several municipalities exceeded it. For 2024, after statutory exemptions had been taken into account and the reported data verified, fines were imposed on five of the 26 municipalities initially identified. For 2025, 17 municipalities are preliminarily at risk of receiving a fine, while the reported data are still being verified. A further 22 municipalities were contacted because they had not submitted the required financial statements. Although the Ministry of Finance has assessed compliance with the debt rule and imposed fines since 2015, it has not yet published a single evaluation. The CBR therefore recommends that the Ministry of Finance transparently disclose[27] all information relating to the verification of local government debt and the imposition of fines.

Fiscal transparency rules

The fiscal transparency rules defined by the constitutional act were largely, but not fully, complied with. The tax revenue forecast approved by the Committee for Tax Forecasts was not published by 15 February 2025, as required by the constitutional act[28]. The 2026-2028 general government budget contained all the data required by law except for information on most companies in which the Ministry of Health of the Slovak Republic holds an ownership interest (Debitum, a.s., health-care facilities and Všeobecná zdravotná poisťovňa). The annual summary report for 2024 contained all the data required by law.

The CBR also assesses fiscal transparency in terms of the informational value and comprehensibility of the information contained in the documents under review, the consistent application of the ESA 2010 methodology, and the degree of parliamentary control over budget approval and execution. No progress has been made in the areas addressed by the CBR’s recommendations in its August 2025 report[29]. On the contrary, the availability of information on the actual state of public finances deteriorated, as, unlike in previous years, the government did not publish the expected development of general government revenue and expenditure excluding additional measures – the so-called fiscal outlook. It is therefore unclear what scale of consolidation measures it assumes in the coming years.

According to the CBR, the most significant persisting shortcomings, whose removal would help improve fiscal transparency and the budgetary process as a whole, include the following:

• The general government budget was aligned with the budgetary objectives only for 2026. To meet the budgetary objectives for 2027 and 2028, it lacked specific measures amounting to 1.6% and 1.8% of GDP, respectively. Nor did the amended public expenditure ceilings, which are linked to the reformed European fiscal rules and assess compliance only for the following year, make the preparation of the three-year budget more binding.
• The legislative framework for approving the budget in the National Council of the Slovak Republic is inadequate in terms of both the subject matter and the content of the documents being approved. The National Council approves only the cash-based state budget for the following year. This historically established model does not capture the key parameters of public finances as a whole or all changes to them under the European standards defined by the ESA 2010 methodology.
• Moreover, given the importance of the document, the process for approving the 2026-2028 budget was disproportionately short[30]. It limited the scope for informing the public and members of parliament, curtailed the discussion in the National Council’s Committee on Finance and Budget, to whose hastily convened meeting the CBR was not invited in advance[31], and reduced the quality of public, expert and parliamentary scrutiny.
• Transparency on the expenditure side of the budget remains low. Following the repeal of the statutory requirement to prepare the budget on the basis of a no-policy-change scenario^[32], the impact of incorporated measures is not quantified, except for health-care expenditure. Transparency is also reduced by the fact that certain expenditures originally classified as budget reserves continue to be budgeted centrally under the General Treasury Administration chapter, but now as ordinary expenditure items^[33]. In substance, they continue to function as reserves: when the budget is approved, they are not allocated to specific budget chapters and their final use is determined only during the year^[34]. As the quarterly reporting obligation applies only to reserves defined by law^[35], the regular publication of comparable information on transfers and the use of funds is not guaranteed for these expenditures. This makes ongoing scrutiny by the National Council and the public more difficult.
• Information on state-owned enterprises should be improved. Adding a brief commentary on the expected financial performance of individual enterprises would allow a better assessment of the risks arising from the performance of enterprises owned by the state or by MH Manažment, a.s.
• The informational value of the net-worth indicator would be enhanced by valuing the components that have not yet been quantified; the Ministry of Finance should assign greater priority to this task and present concrete results within a reasonable period[36]. For a more detailed assessment of the impact of government measures on net worth, it is also necessary to create the technical conditions for data collection and, in co-operation with the CBR, define a methodology linking changes in net worth to the budget balance.

[1]     Constitutional Act No. 493/2011 Coll. on Fiscal Responsibility.

[2]     Constitutional Act No. 422/2020 Coll., effective from 1 January 2021, added Article 55a to the Constitution of the Slovak Republic No. 460/1992 Coll.

[3]     CBR, Report on the Long-term Sustainability of Public Finances for 2025, April 2026 (only in Slovak, Key Conclusions available in English).

[4]     The consolidation packages for 2024 and 2025 and the factors reducing their permanent contribution are analysed in greater detail in the CBR Secretariat commentary by Majher, P., Why Deficits Remain High Even After Two Consolidations, August 2025 (only in Slovak). The composition of the consolidation package for 2026 and its impact on economic growth and public finances are discussed in the CBR Secretariat commentary by Múčka, Z. and Majher, P., It Is Not Only the Size of Consolidation That Matters, but Also Its Composition, March 2026 (only in Slovak).

[5]     CBR, Medium-term Fiscal Forecast, July 2026 (only in Slovak).

[6]     The long-term sustainability indicator shows the scale of the correction required if developments follow the no-policy-change scenario. It does not, however, indicate what will happen if developments deviate from that scenario – which is precisely why fiscal space is needed.

[7]     Ministry of Finance of the Slovak Republic, Annual Progress Report of the Slovak Republic 2026, April 2026.

[8]     During the current electoral term, the government has already relaxed its budgetary objective twice. The deficit originally targeted for 2027 was 3.0% of GDP; the government first relaxed it to 3.5% of GDP in 2025 and subsequently to 4.2% of GDP in 2026.

[9]     CBR, Medium-term Fiscal Outlook for 2026 to 2028 (Assessment of the 2026 Annual Progress Report), May 2026 (only in Slovak, Key Conclusions available in English).

[10]    Judgment of the Constitutional Court of the Slovak Republic, Case No. PL. ÚS 13/2022, paragraphs 158 and 159.

[11]    Current cases are presented in the section entitled General government debt limit.

[12]    The upper debt limit was 53% of GDP in 2024 and 52% of GDP in 2025.

[13]    The debt-to-GDP ratio for 2025 will be definitively confirmed in the autumn notification in October 2026.

[14]    The obligation to apply sanctions associated with exceeding the third, fourth and fifth debt-brake sanction brackets does not apply for 24 months after the government manifesto is approved and the government receives a vote of confidence. As the National Council of the Slovak Republic approved the manifesto of the new government of the Slovak Republic for 2023-2027 and passed a vote of confidence in the government on 21 November 2023, the 24-month exemption took effect on the following day.

[15]    Debt-brake sanctions apply cumulatively, beginning with the sanctions triggered by exceeding the second bracket and extending to those triggered by the highest sanction bracket.

[16]    Formal compliance with the constitutional act without fulfilling its purpose may be deemed a violation thereof. The Constitutional Court of the Slovak Republic emphasised the practical implementation of the law over formalism, for example in relation to the CBR’s tasks in paragraph 161 of the reasoning of the judgment in Case No. PL. ÚS 13/2022. The Constitutional Court also recalled that the Constitution is not a document containing normatively irrelevant proclamations whose meaning is determined only by subsequent legislative activity, but rather a genuine set of directly applicable norms, principles and values with their own specific normative effect.

[17]    The CBR’s opinion is based on the judgment of the Constitutional Court of the Slovak Republic of 17 June 2026, Case No. PL. ÚS 6/2026 (paragraph 44).

[18]    Judgment of the Constitutional Court of the Slovak Republic of 17 June 2026, Case No. PL. ÚS 6/2026.

[19]    Moreover, given the importance of the document, the process for approving the 2026-2028 budget was disproportionately short. Four working days elapsed between the first publication of the budget proposal and its scheduled consideration by the lead committee of the National Council, an unprecedentedly short period in the history of state-budget approval. For the first time, the CBR was not informed in advance or invited to present its view of the budget. Such a short period limited the scope for informing the public and members of parliament, curtailed discussion in the National Council’s Committee on Finance and Budget, and reduced the quality of public, expert and parliamentary scrutiny.

[20]      According to the Ministry of Finance’s position, the sanctions did not apply to 2026 budgets if local governments approved them before 22 November 2025. According to the Ministry of Finance, the obligation to approve a budget with no increase in expenditure and with a balanced or surplus balance would apply only to budgets for 2027 if the sanctions remained in force.

[21]    A local government budget is required to comply with the requirements of the constitutional act at all times, whereas in the case of the state budget the sanction applies only to the budget proposal submitted by the government.

[22]    The general government deficit reached 4.5% of GDP in 2025 and was therefore 2.8 percentage points of GDP lower than the rule would have permitted.

[23]    In 2025, the government provided grants to local governments and partially remitted their repayable financial assistance. The government had originally provided these funds to municipalities and self-governing regions to compensate for the shortfall in personal income-tax revenue in 2024 and to help finance the €800 bonuses for employees working within local governments’ own competences.

[24]    CBR, Addendum to the Assessment of the General Government Budget for 2026 to 2028, January 2026, Annex 2 (only in Slovak).

[25]    The SK8 Association estimated the unfunded impact of this legislative change on the budgets of self-governing regions at approximately €19 million per year from 2027.

[26]    The debt limit is set at 60% of current revenue in the preceding year.

[27]    The CBR does not have final data on municipal debt adjusted on the basis of the Ministry of Finance’s verification of the reported figures.

[28]    The Ministry of Finance’s website does not state the exact date on which the tax revenue forecast was published (the commentary on the February forecast, which is regarded as the forecast’s official publication, likewise contains no specific date), while the Institute for Financial Policy website gives 17 February 2025 as the publication date of the February tax revenue forecast.

[29]    An assessment of compliance with the CBR’s recommendations is provided in Annex 3.

[30]    Four working days elapsed between the first publication of the budget proposal and its scheduled consideration by the lead committee of the National Council, an unprecedentedly short period in the history of state-budget approval. For more details, see Box 2 in the CBR’s Addendum to the Assessment of the General Government Budget for 2026 to 2028 (only in Slovak).

[31]    The CBR ultimately attended the committee meeting, but was notified only after it had begun. Such an approach cannot be regarded as good practice.

[32]    With effect from 1 August 2024, the second sentence of Section 4(2) of the Act on the General Government Budgetary Rules was repealed: The general government budget shall be prepared and implemented in accordance with the public expenditure ceiling on the basis of no-policy-change scenarios. The Ministry of Finance justified the amendment by the need to ensure compliance with the commitments approved in the medium-term fiscal-structural plan under the new European rules. In the CBR’s view, however, preparing the budget on the basis of no-policy-change (NPC) scenarios is not inconsistent with the requirement that the budget be prepared in accordance with the new European rules (the required expenditure growth rate is achieved precisely through measures going beyond the NPC scenario).

[33]    The amendments to Section 10 of Act No. 523/2004 Coll., made by Act No. 118/2024 Coll., took effect on 1 August 2024. Since then, the act has defined four budget reserves: the government reserve, the prime minister’s reserve, the reserve for addressing adverse developments in budgetary performance, and the reserve for crisis situations outside wartime and a state of war and for carrying out flood-protection works. The prime minister’s reserve is budgeted under the Government Office chapter and the other reserves under the General Treasury Administration chapter. Budget reserves for 2024 amounted to approximately €2.5 billion. Following the legislative amendment, only €0.3 billion was budgeted for them in 2025, while their budgeted amount in the current 2026 budget is only €21 million. Because the statutory definition of reserves has changed, these amounts are not fully comparable in substance.

[34]    From the perspective of transparency, expected expenditure should be itemised to the greatest extent possible directly under the budget chapters in which it is actually to be used.

[35]    The amendment to Act No. 523/2004 Coll. on the General Government Budgetary Rules introduced an obligation to publish information on the use of reserves on a quarterly basis (instead of the previous half-yearly frequency) on the websites of the Ministry of Finance and the Government Office.

[36]    The Ministry of Finance confirmed that it is continuing to work on the methodology for the net worth concept of the Slovak Republic. It has focused on three unmapped areas that have not yet been reported or quantified: the valuation of Slovakia’s cultural heritage, ecosystems and ecosystem services in Slovakia, and protected areas (forests, water, fauna and flora).

Príspevok Report on Compliance with the Fiscal Responsibility and Fiscal Transparency Rules for 2025 (august 2026) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

• CBR has slightly increased its estimate of the 2026 GG deficit. Compared with the June forecast, the expected deficit has slightly increased by EUR 27 million mainly due to faster-than-expected spending of state budget current expenditures.
• According to the CBR, the 2026 deficit could reach 4.4 % of GDP (EUR 6.2 billion), if the government does not adopt additional measures. This represents a negative deviation of 0.3 % of GDP (EUR 389 million) from the approved budget amounts, indicating a medium level of risk that the public deficit will exceed the government’s objective.
• Compared to the government’s estimate published in the Annual Progress Report 2026 for Slovakia, the level of the CBR deficit forecast is almost identical (a difference is EUR 33 million).
• The most significant negative deviation in the CBR forecast compared to the budget is the shortfall in taxes and social and healthcare contributions amounting to 0.3 % of GDP (EUR 437 million), mainly due to lower-than-expected CIT and VAT. The CIT shortfall is due to unexpected decline in the 2025 revenue, based on the corporate tax returns submitted to date. On the other hand, slower growth in household consumption than assumed in the budget is expected to reduce VAT revenue.

Príspevok The estimated deficit for 2026 remains almost unchanged; the budget target may be exceeded by 0.3 % of GDP (EUR 389 million) (Budgetary Traffic Light July 2026) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

• CBR has slightly increased its estimate of the 2026 GG deficit. Compared with the May forecast, the expected deficit has increased by EUR 118 million mainly due to faster growth in the wage bill and expenditure related to the EU Recovery and Resilience Plan.
• According to the CBR, the 2026 deficit could reach 4.4 % of GDP (EUR 6.2 billion), if the government does not adopt additional measures. This represents a negative deviation of 0.3 % of GDP (EUR 361 million) from the approved budget amounts, indicating a medium level of risk that the public deficit will exceed the government’s objective.
• Compared to the government’s estimate published in the Annual Progress Report 2026 for Slovakia, the level of the CBR deficit forecast is almost identical (a difference is EUR 5 million).
• The most significant negative deviation in the CBR forecast compared to the budget is the shortfall in taxes and social and healthcare contributions amounting to 0.4 % of GDP (EUR 527 million), mainly due to lower-than-expected CIT and VAT. The CIT shortfall is due to unexpected decline in the 2025 revenue, based on the corporate tax returns submitted to date. On the other hand, slower growth in household consumption than assumed in the budget is expected to reduce VAT revenue.

Príspevok Faster expenditure growth raises the projected 2026 deficit; the budget target may be exceeded by 0.3 % of GDP (EUR 361 million) (Budgetary Traffic Light June 2026) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

Príspevok Medium-term fiscal outlook for 2026 to 2028 (2026 Annual Progress Report) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

• CBR has slightly decreased the estimated level of GG deficit in 2026. Compared with the April forecast, the expected deficit has decreased by EUR 46 million mainly due to reduced shortfall in estimated tax and social contribution revenues.
• According to the CBR, the 2026 deficit can reach the level of 4.3 % of GDP (EUR 6.1 bn.), under the assumption that the government does not take additional measures. Negative deviation from the approved budget amounts to 0.2 % of GDP (EUR 248 million), which means the medium-level risk of the public deficit level exceeding the government objective.
• Compared to the government’s estimate published in the Annual Progress Report 2026 for Slovakia, the level of the CBR deficit forecast is lower by 0.1 % of GDP (EUR 97 million) mainly due to better estimated financial performance of other GG entities.
• The most significant negative deviation in the CBR forecast compared to the budget is the shortfall in taxes and social and healthcare contributions amounting to 0.4 % of GDP (EUR 635 million), mainly due to lower-than-expected VAT and CIT. The shortfall compared to the budget is mainly caused by less favorable economic development than was originally assumed in the budget. Slower growth in household consumption will reduce VAT revenues and lower nominal wages are pushing down social contributions and labor taxes.

Príspevok The estimated deficit for 2026 decreased slightly; nevertheless, the budget target may be exceeded by 0.2 % of GDP (EUR 248 million) (Budgetary Traffic Light May 2026) je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.

Assessment of Compliance with Expenditure Ceilings in 2025

Pursuant to obligations arising from Section 30(4) of Act No. 523/2004 Coll. on General Government Budgetary Rules (hereinafter the “Act”), the Council for Budget Responsibility (CBR) assesses compliance of the budgetary outturn with the net expenditure path (the Stability and Growth Pact rule) and with the public expenditure ceiling (the national rule). At the same time, it publishes an analysis of the factors explaining deviations from the net expenditure path.

The CBR assessment is based on data for 2023–2025 from the spring deficit and debt notification published by the Statistical Office of the Slovak Republic on 21 April 2026, supplemented by the CBR’s own estimates of cyclical unemployment benefit expenditure and the impact of discretionary revenue measures.

Incorrect initial calibration of the rules causes the ineffectiveness of expenditure ceilings in Slovakia

The reformed Stability and Growth Pact (EU fiscal rules) was intended to enable countries to reduce deficits and debt in a sustainable and realistic manner through control of expenditure growth. Its objective was to stabilise public debt below 60% of GDP. Although this framework appears to be clearly defined at first glance, in the case of Slovakia, its initial calibration was flawed[1], as also pointed out by the CBR.

Under the applicable rules, the Ministry of Finance of the Slovak Republic (MF SR) was the only entity authorised to request correction of this flawed initial calibration. Unlike several other EU Member States, however, the MF SR did not take such action. As a result of the passive approach of the MF SR in setting the rules[2], the current EU fiscal rules now allow, according to the latest estimates, the achievement of a general government deficit of approximately 5.4% of GDP and public debt of 73.3% of GDP by the end of 2028.

This implies that in Slovakia’s case, mere compliance with EU rules would not be sufficient to ensure long-term sustainability of public finances. Since the national expenditure rule is derived from the EU fiscal rule, its functioning is likewise affected by this flawed initial calibration. Assessment of compliance with both rules therefore needs to be interpreted in this context.

Growth of net expenditure in 2024 and 2025 (Stability and Growth Pact rule)

On 21 January 2025, the Council of the European Union approved Slovakia’s national medium-term fiscal-structural plan, including the maximum growth rate of net expenditure for individual years during 2025–2028 and the cumulative growth rate of net expenditure in 2028 compared to 2023 (Table 1). In 2025, the rule allowed a cumulative growth in net expenditure of 10.3%.

Subsequently, on 8 July 2025, the Council of the European Union approved activation of the national escape clause for the Slovak Republic, whereby the exemption allows defence expenditure in 2025–2028 to increase by up to 1.5% of GDP relative to the 2021 level without being included in expenditure subject to the ceiling[3].

When assessing compliance of the budgetary outturn with the net expenditure path, the CBR proceeded according to the definition of maximum net expenditure growth under the EU fiscal rules, whereby expenditure financed from the EU budget, co-financing, interest costs, cyclical unemployment expenditure and one-off impacts are deducted from total general government expenditure. Subsequently, after calculating the growth rate of net expenditure incorporating the effect of discretionary revenue measures, the impact of the defence exemption is also deducted. The CBR assesses compliance with the rule on a cumulative basis, which is fully consistent with the approach of the European Commission, which will assess the rule cumulatively in countries with an active national defence escape clause[4].

The CBR concludes that the net expenditure growth in 2025 (without applying the defence exemption) reached 1.3% year-on-year, which is 2.6 percentage points below the approved trajectory. Cumulative growth in net expenditure for 2024 and 2025, after inclusion of the defence exemption, reached 3.3%, thereby meeting the rule with a margin of 7.0 percentage points[5] (Table 2). Such compliance with the rule is partly influenced by the government’s consolidation measures approved at the end of 2023 and 2024, which increased revenues (thereby also increasing room for expenditure growth), as well as by factors outside the government’s control (decline in energy subsidies due to falling energy prices). To a large extent, however, it is mainly the consequence of incorrectly calibrated rules for Slovakia[6], since using the maximum room for expenditure growth allowed by the rule would have enabled the general government deficit to reach as high as 7.3% of GDP in 2025[7]. This is inconsistent with the main objective of the rule – to sustainably reduce the deficit below 3% of GDP and debt below 60% of GDP.

Despite formal compliance with the rules, the development of public finances is significantly more negative than the original projected trajectory of deficit and debt by the European Commission. The Commission originally projected that compliance with the expenditure rule targets would stabilise debt and expected a deficit of 1.7% of GDP and debt of 61% of GDP in 2028. Currently, under compliance with the rules, the CBR estimates a deficit of 5.4% of GDP[8] and debt of 73.3% of GDP in 2028.

Analysis of factors explaining deviations from the net expenditure trajectory

By comparing the cumulative year-on-year development of individual expenditure categories (adjusted for the impact of EU funds, co-financing, interest costs and the economic cycle) with the maximum cumulative growth in net expenditure, the CBR calculated their contributions to the total deviation (Chart 1).

The lower pace of growth in net expenditure was driven mainly by the substantial decline in expenditure related to extraordinary events, particularly energy subsidies, which recorded the sharpest decrease since 2023 (contribution of 4.2 percentage points). From the perspective of cumulative compliance with this expenditure rule, this only formally represents a permanent saving[9], provided that expenditure on energy subsidies does not return to the high levels seen in 2023. The reason is that this does not represent an active saving resulting from government policy, but merely reflects the natural decline in market prices from the extreme levels observed in 2023. A significant contribution also came from the decline in social transfers in 2025 (1.9 percentage points), mainly reflecting the reduction in the child tax credit approved back in 2022[10], as well as lower expenditure on sickness benefits and parental allowance in 2025. Investments outside the defence sector declined compared to 2023 (contribution of 1.7 percentage points).

On the other hand, expenditure on healthcare provided by health insurance companies (0.4 percentage points) and compensation of employees (0.3 percentage points) grew more rapidly, primarily reflecting wage indexation. However, the most pronounced increase in expenditure occurred in the defence sector (1.9 percentage points), mainly due to deliveries of military equipment in 2025. Given the defence exemption, however, the overall negative impact of defence amounted to only 0.4 percentage points.

Public expenditure ceiling for 2025 (national rule)

The nominal value of the public expenditure ceiling for 2025 was calculated by the MF SR based on the recommendation of the Council of the European Union, according to which growth in net primary expenditure in 2025 compared to 2024 should not exceed 3.8%. The same set of expenditure items fell under the public expenditure ceiling as under the definition of net primary expenditure in the reformed Stability and Growth Pact rules[11].

The public expenditure ceiling for 2025 was approved together with the general government budget for 2025-2027 on 3 December 2024, and its value was set at EUR 61,143,359,188. According to the CBR, the ceiling was met with a margin of EUR 1.4 billion (Table 3). If the assessment of the ceiling also incorporated differences in the estimate of discretionary revenue measures (DRM) compared to their value used in calculating the ceiling, and reflected the approved national defence escape clause allowing the established ceiling to be exceeded[12], the ceiling would have been met by EUR 2.1 billion.

Since the nominally determined ceiling serves for operational budget management[13] and is linked to the net expenditure growth rule under the Stability and Growth Pact, it is important for these rules to be mutually consistent. This is currently not the case, since under the nominally determined ceiling the deficit in 2025 could reach a maximum of 6.0% of GDP, while the EU rule allowed a deficit of as much as 7.3% of GDP. The main reason is the annual horizon of the national rule, since unlike the EU rule assessed cumulatively over several years, it does not take into account the degree of compliance with the ceiling in previous years. At the same time, the level of the nominally determined ceiling does not flexibly reflect changes in assumptions on the basis of which it was calculated[14]. This mainly concerns changes in reported expenditure for the previous year and changes in the estimated impact of discretionary revenue measures.

[1]      This material only addresses the assessment of developments in Slovakia. However, a similar situation may also have arisen in other EU Member States where the calibrated net expenditure growth rules may not lead to a sufficient reduction in the deficit.

[2]      There is no legal basis for the European Commission to impose stricter assumptions on a Member State than those resulting from its own framework. Only the MF SR, officially on behalf of the Slovak Republic as an EU member state, could have requested such a revision, but it did not make use of this possibility.

[3]      The level of defence expenditure covered by the escape clause does not change the maximum permitted growth rate of net expenditure. However, the level of the exemption reduces the deviation of actual expenditure falling under the rule in the control account.

[4]      The European Commission will assess the rule for the first time in spring 2026, when, in the case of countries with an activated defence escape clause, it will assess compliance with the net expenditure growth rule cumulatively for 2024 and 2025.

[5]      According to the MF SR assessment, the rule was met with a margin of 6.5 percentage points. The difference in the results is explained almost exclusively by the estimated impacts of discretionary revenue measures in 2025. According to the MF SR, revenue measures generated additional revenues of EUR 1,446 million in 2025, whereas the CBR estimates their impact at EUR 1,673 million (the list of measures is provided in Annex 1).

[6]      Skopál (2026), Failed Implementation of European Rules in Slovakia Should Require a More Ambitious Domestic Approach to Mend Public Finances.

[7]      In 2025, the general government deficit reached 4.5% of GDP.

[8]      The defence exemption, which was not considered in the European Commission’s original trajectory, contributes 0.7% of GDP to the 2028 deficit of 5.4% of GDP.

[9]      From an economic perspective, this expenditure was only temporarily increased due to extremely high energy prices and its decline should therefore not be perceived as a structural reduction in expenditure resulting from government policy.

[10]     The child tax credit was temporarily higher only in 2023 and 2024.

[11]     Total general government expenditure was adjusted by deducting expenditure financed from the EU budget (standard EU funds, Recovery and Resilience Facility resources and EU grants), co-financing of joint Slovak Republic and EU programmes, interest costs, cyclical unemployment expenditure and one-off impacts (according to the EC approach – for example, the EC does not consider energy subsidies to be one-off expenditure, as these represent a discretionary government measure).

[12]     The Act stipulates that the ceiling may be exceeded if an escape clause is activated, which also includes the approved exemption for defence expenditure. However, it does not define the method for assessing compliance with the nominal public expenditure ceiling, nor does it specify the factors that should be considered in its assessment. Incorporating the actual impact of discretionary revenue measures would be consistent with the fundamental rationale of the rule, i.e. it does not distinguish whether the set expenditure growth rate is achieved through revenue-side or expenditure-side consolidation measures. Another factor that could be taken into account in assessing compliance with the ceiling is the fact that expenditure for the base year 2024, from which the 2025 ceiling was calculated at the given expenditure growth rate, was also revised. However, the applicable Act does not provide for such an adjustment either.

[13]     The MF SR allocates the nominal public expenditure ceiling into limits for individual general government entities, which are required to comply with them.

[14]     According to the MF SR, practical obstacles exist that prevent alignment of the two rules. Most inputs into the ceiling calculation change continuously and relatively frequently over time (estimated defence expenditure, amount of EU funds, expenditure of the previous year, discretionary revenue measures), which in practice makes it impossible to maintain a stable estimate of the nominal public expenditure ceiling. Moreover, the ceiling is subsequently distributed among individual budget chapters, which creates a significant implementation challenge if frequent updates are required.

Príspevok Assessment of Compliance with Expenditure Ceilings in 2025 je zobrazený ako prvý na Rada pre rozpočtovú zodpovednosť.