Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations that may act as a lender of last resort.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic or financial-market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit rating’s performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope announces the result of each monitoring review on its website and/or on its subscription platform ScopeOne.

Scope completed the monitoring review for the Slovak Republic (long-term local- and foreign-currency issuer and senior unsecured debt ratings of A and Negative Outlook; short-term local- and foreign-currency issuer ratings of S-1 and Stable Outlook) on 2 December 2025.

This monitoring note does not constitute a credit-rating action, nor does it indicate the likelihood that Scope will conduct a credit-rating action in the short term. Information about the latest credit-rating action connected with this monitoring note along with the associated ratings history can be found on scoperatings.com.

Key rating factors

For the updated rating report accompanying this review, please see here.

Slovakia’s A long-term credit ratings are supported by: i) EU and euro area memberships – representing a strong anchor for policy making and backing the country’s resilience against external crises; ii) competitive, export-oriented industries; and iii) a moderate, albeit rising, level of government debt.

Conversely, credit challenges associate with: i) significant budget deficits even though moderated by the ongoing implementation of budgetary-consolidation measures; ii) elevated dependence on external demand and global value chains; iii) the effects of adverse demographics on long-run economic and budgetary outlooks; and iv) institutional risk and governance challenges, including effects of past delays in receiving EU funding.

Following 2.1% growth in 2024, supported by rising domestic demand as inflationary pressures eased, Slovakia’s export-oriented economy slowed down markedly in 2025. This was mostly due to an unfavourable external environment, with heightened global trade uncertainties amid higher US tariffs and lower economic growth in major European trading partners. Further headwinds to economic growth stem from the ongoing fiscal consolidation. Scope projects real GDP growth at 0.8% in 2025 and only a moderate improvement to 1.2% in 2026, when weaker foreign demand and challenges from the fiscal consolidation process will likely be partially offset by an acceleration in the implementation of Recovery and Resilience Plan’s investments. In 2027, economic growth should continue to recover gradually to around 1.5%, when the expected opening of a Volvo car plant should expand industrial production capacity. Over the medium-term, Scope expects growth to reach approximately 2% by 2030 in the absence of additional shocks.

The continued application of the fiscal consolidation strategy, including the implementation of two consecutive packages worth EUR 1.9bn (1.5% of GDP) in 2024 and EUR 2.7bn (1.9% of GDP) in 2025, helped containing the increase in the budget deficit. The budget deficit stood at 5.3% of GDP in 2024, in line with the 5.2% in 2023. Still, the measures taken to date are not sufficient to significantly reduce the budget deficit, which Scope estimates at around 5.1% of GDP in 2025. Most of the measures introduced in the past two years targeted the increase of general government revenues via, for example, the introduction of a minimum corporate tax, higher VAT tax rate and the introduction of a financial transaction tax.

To further reduce the deficit and guarantee debt sustainability, in September 2025, the government announced a third fiscal consolidation package for 2026. Most of the measures continue to be focused on raising government revenues through higher healthcare contributions, increases in personal income tax progressivity and VAT rate increases on selected goods, complemented by the reduction of some expenditure items such as cuts to administration costs and temporary freezes in public wage growth, among others.

In Scope’s view, the subdued economic outlook and mounting spending pressures such as on interest costs, as well as defence and healthcare expenditure, risk to prevent the government from substantially reducing the budget deficit next year despite revenue-focused consolidation plans. Beyond 2026, a fragmented political environment and upcoming political elections in 2027 could challenge the government’s ability to introduce additional consolidation measures.

Scope forecasts the general government deficit to decline to 4.3% of GDP in 2026, given the expected implementation of the third fiscal consolidation package, before widening moderately to 4.6% of GDP in 2027. Over the same period, Scope projects the debt-to-GDP ratio to increase from 59.3% in 2024 to 66.4% in 2027. Looking beyond 2027, Scope expects the government deficit to gradually decline to around 3.3% of GDP by 2030, assuming that some commitment to fiscal consolidation will be maintained. Together with a gradual economic recovery, this should help to contain the increase in the debt-to-GDP ratio, projected to remain on an upward trajectory but still at moderate levels, reaching 69.6% by 2030. Conversely, delays and slippages that result in wider-than-expected fiscal deficits and/or a steeper public debt trajectory compared to Scope’s baseline would be credit negative.

Scope will thus monitor closely the effectiveness of the fiscal consolidation plan in improving the budget deficit and public debt levels vis-à-vis the set targets, as well as the extent to which the government will be able to introduce additional measures in the coming years to sustainably reduce public expenditure, despite significant spending pressures, including those arising from interest payments and defence investments. Against this backdrop, European and euro area memberships facilitating access to substantive structural and recovery funds, alongside a relatively robust manufacturing sector benefitting from sizeable inward foreign direct investments, remain essential supportive factors to Slovakia’s creditworthiness.

The Negative Outlook reflects Scope’s view that risks to the ratings are skewed to the downside.

Downside scenarios for the ratings and Outlooks are (individually or collectively):

1. The fiscal outlook weakens, resulting in larger-than-expected fiscal deficits and continued rising government debt;
    
2. The economic outlook weakens, for example, due to a domestic or external economic shock, lowering economic growth and/or the country’s medium-term growth potential; and/or
    
3. Institutional risks or political instability increases, raising the materiality of governance concerns and/or challenging European fund inflows.

Upside scenarios for the ratings and Outlooks are (individually or collectively):

1. The fiscal outlook improves, for example, due to a sustained reduction in budget deficits leading to a stabilisation or even decline of the government debt ratio; and/or
    
2. The near- and medium-term growth outlook improves.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Sovereign Rating Methodology, 27 January 2025) is available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Alessandra Poli, Analyst

© 2025 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Fund Analysis GmbH, Scope Innovation Lab GmbH and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5, D-10785 Berlin. Public Ratings are generally accessible to the public. Subscription Ratings and Private Ratings are confidential and may not be shared with any unauthorised third party.