Slovakia 2026 Outlook: Pre-election tensions meet a fiscal squeeze

Slovakia will face a turbulent year ahead. While the parliamentary election is scheduled for 2027, the political battles will already intensify in 2026 – and they will collide with the tangible effects of the latest rounds of fiscal consolidation. Three areas merit close attention to understand Slovakia’s evolving trajectory in the months ahead.

Intensifying political and institutional battles

The deteriorating economic situation will translate into declining support for the ruling party SMER. Progresívne Slovensko (PS) has already surpassed SMER in polls, and this lead is likely to solidify. A sizeable portion of SMER’s electorate will continue shifting to Republika and other smaller parties. SMER has already moved into damage control through rhetorical convergence with Republika and a sharper “anti-progressive” positioning. Whether this strategy works should become clearer in the 2026 municipal elections.

Even if the PS-led opposition stays ahead by year-end, the decisive challenge will be setting the stage for a post-election coalition pathway. Movement Slovensko, led by Igor Matovič, is likely to benefit from a polarised SMER–PS contest and could again climb above 10%. Either way, it is set to remain a pivotal player in any viable anti-SMER coalition.

Despite continuing tensions within the governing coalition, early elections remain unlikely and Fico is positioned to govern through to 2027. As the fear of losing power intensifies, the coalition may revive attempts to change election rules, including raising the parliamentary threshold – an adjustment that would disproportionately disadvantage smaller parties.

As the fear of losing power intensifies, the coalition may revive attempts to change election rules.

Another consolidation ahead, slower growth

The government’s plan to bring the public finance deficit down to 3.5% of GDP in 2026 is likely to fall short, and the last consolidation round makes another adjustment increasingly likely. Whether the coalition proceeds in a pre-election year remains uncertain, but if it does, the package will likely lean on new business-targeted taxes and/or deeper expenditure-side cuts. Social benefits, especially those aimed at the current coalition’s electorate, will largely remain protected as momentum builds toward the 2027 parliamentary elections, and any consolidation will prioritise short-term fixes over long-delayed structural reforms.

Whether the coalition proceeds in a pre-election year remains uncertain, but if it does, the package will likely lean on new business-targeted taxes and/or deeper expenditure-side cuts.

Economic growth, still driven largely by car exports, will face weaker demand and Trump-imposed tariffs, only partly offset by higher European sales. A German recovery and a new wave of EU-funded investment via the Recovery and Resilience Facility may provide some support – if channelled effectively – but neither will lift Slovakia from its expected below-EU-average growth. 

(Un)predictable geopolitics

There is little reason to expect Slovakia to take formal steps to leave the EU or NATO. Prime Minister Fico will continue his long-term “politics in all directions”: ostentatious criticism of Brussels and the “West” at home, paired with pragmatic quiet abroad on most issues. The approach is visible in Fico’s recent engagement with the US President Trump: despite hawkish voices within his own party and across the coalition, he moved ahead with a strategic nuclear-energy cooperation agreement with the US.

Fico will continue his long-term “politics in all directions”: ostentatious criticism of Brussels and the “West” at home, paired with pragmatic quiet abroad on most issues.

Hungary’s parliamentary election could weaken Viktor Orbán and leave Fico without his most reliable ally in EU-level confrontations. In that scenario, pressure on Fico would rise from both Brussels – to stay in line – and Moscow – to keep advancing its interests. As always, he will prioritise whatever delivers the largest political and financial returns. Fico may also seek a deeper partnership with Czech Prime Minister Andrej Babiš, though neither of them are likely to match Orbán’s level of EU defiance.

Concerning the Russo-Ukrainian war, despite the governing coalition’s calls for peace, arms deliveries to Ukraine from Slovakia-based manufacturers will likely continue as long as demand persists – driving the continued growth in Slovakia’s arms industry.

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