International Monetary Fund staff published a concluding statement following its 2026 Article IV mission to the Slovak Republic, warning that slower growth and a still-elevated fiscal deficit are complicating efforts to put public debt on a sustainable path. The statement calls for a credible multi-year fiscal strategy alongside productivity-enhancing reforms, while keeping financial-sector oversight tight as the economy cools. Growth is estimated to have slowed to 0.8 percent in 2025 from 1.9 percent in 2024, with the fiscal deficit estimated at 5 percent of GDP, and staff projects growth of 0.9 percent in 2026 alongside a headline deficit of 4.4 percent of GDP, above the 4.1 percent budget target. Under a baseline of no further consolidation from 2027, debt is projected to rise to close to 105 percent of GDP by 2040, and meeting the authorities’ deficit target of 2.8 percent of GDP by 2028 would require about 2.3 percent of GDP in additional measures, with a further 1.7 to 2.3 percent of GDP needed beyond 2028 to offset aging-related pressures. Options highlighted include VAT and property-tax reforms, reducing the VAT compliance gap, better targeting social spending, pension parameter changes, and phasing out energy support (projected at 0.3 percent of GDP in 2026), while approaching tax amnesties with caution given potential compliance and money laundering risks; reforming the debt brake ahead of its reactivation in 2026 is also flagged. On financial stability, the banking sector is described as resilient and the macroprudential stance as broadly appropriate, with the countercyclical capital buffer and borrower-based measures kept unchanged and the bank levy to be phased out as planned, while further progress is urged on Financial Sector Assessment Program recommendations and on anti-money laundering and combating the financing of terrorism measures, including beneficial ownership transparency and tax-crime related risks. IMF staff will prepare a report for discussion and decision by the IMF Executive Board, subject to management approval.
International Monetary Fund 2026-01-27
International Monetary Fund issues Slovak Republic Article IV concluding statement urging multi-year fiscal consolidation and structural reforms
The International Monetary Fund's 2026 Article IV mission to the Slovak Republic highlights concerns over slower growth and a high fiscal deficit, complicating debt sustainability efforts. Recommendations include a multi-year fiscal strategy, productivity reforms, and maintaining tight financial oversight, with specific measures such as VAT and property-tax reforms, better-targeted social spending, and pension changes to meet deficit targets.