The cabinet endorsed the 2027 budget with the shortfall set at 4.9% of economic output - larger than EU limits and the biggest in three years. The government chalked up the trend to an "unfavorable macroeconomic environment," pointing to geopolitical shocks that have driven up energy prices and weighed on an industry-oriented economy, according to the Finance Ministry.
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The plan still needs a vote in parliament. General elections are set for September, and Prime Minister Robert Fico's party is currently in second place in polling, with a tight race expected. Fico, a four-time premier, leads a three-party coalition. The government says the economy should accelerate to 1.8% growth next year after 0.8% in 2026, according to the budget plan.
Fico's administration rolled out three consolidation packages that raised taxes and levies for companies and employees, but it has still fallen short of its own goal to rein in public finances. The coalition is funding priorities including social spending, assistance to blunt elevated energy costs, and funding for a new nuclear power plant that Robert Fico wants to add to the country's energy mix.
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