The Slovak economy remains under pressure of fiscal consolidation and elevated energy prices. We project GDP growth at 0.8% in 2026, matching 2025 weak growth, as fiscal consolidation and higher energy prices weigh on household consumption and private investment. Risks persist from uncertainty around the uptake of EU funds and elevated energy costs. We expect growth to pick up from 2H26, supported by the drawdown of EU funds and rising external demand, while new industrial capacity should boost growth in 2027. Inflation is likely to remain elevated, averaging 3.8% in 2026, but government measures continue to shield households from the full impact of energy price increases. Energy prices beyond the impact of the Iran conflict remain a dormant source of inflation in Slovakia. Even as headline inflation remains high, we expect core inflation to continue to slow and fall below 3% in 2H26, helped by weaker consumer demand and slower wage growth, as labour market cools modestly.