Oil barelling upwards (September 2026)

The conflict in the Middle East has escalated again following a temporary lull, pushing global oil prices close to their 2022 levels. The Slovak economy is therefore expected to repeat last year's performance, with GDP growing by 0.8% in 2026. From 2027 onwards, we expect a gradual recovery in domestic consumption and external demand, with GDP growth accelerating to 1.8%. Exports will also benefit from the start of production at the Volvo car plant, helping to offset the decline in funding from the Recovery and Resilience Plan (RRP). Despite higher oil and gas prices, consumer price inflation is expected to moderate to 2.9% next year, as regulated energy prices will still be based on lower global prices prevailing before the conflict. Households will therefore only feel the impact of higher energy prices from 2028 onwards, slightly dampening GDP growth. Employment is expected to stagnate throughout the forecast horizon, partly due to adverse demographic developments, while real wages will continue to grow moderately. From 2029 onwards, the economy will benefit from the absorption of remaining EU funds, pushing GDP growth above 2%. The escalation of the conflict in the Middle East has increased uncertainty surrounding the forecast in both directions. However, a prolonged period of elevated energy prices would represent a downside risk to the outlook.