Slovenia Approves New Two-Year Budget to Drive Growth Without Raising Taxes

2026-10-05 economy

Ljubljana, Sunday, 4 October 2026.
On October 4, 2026, Slovenia approved its 2027–2028 budgets, aiming to lower the deficit to 2.0% of GDP without new taxes while proposing a public sector restructuring referendum.

Fiscal Framework and Deficit Targets

The approved budget for 2027 projects €17 billion in revenue and €19.4 billion in expenditure, resulting in a deficit of 2.9% of GDP [2][3][4][5][6][7]. For 2028, revenue is expected to reach €17.7 billion with expenditures holding at €19.4 billion, targeting a deficit reduction to 2.0% of GDP [2][3][4][5][6][7]. This represents a reduction in the deficit target of 0.9 percentage points between the two fiscal years [2][3][4][5][6][7]. Finance Minister Andrej Šircelj confirmed that the government will not introduce new taxes, adhering to a commitment to avoid additional burdens on the population [1][2][3][5][6][8]. The administration aims to correct a previous deficit of 3.9% of GDP inherited from the predecessor government, which attributed the fiscal gap to uncontrolled spending growth [1][6][8].

Public Sector Restructuring and Referendum

Prime Minister Janez Janša announced a consultative referendum on public sector restructuring and bureaucracy reduction to be held in the coming months [1][2][3][5][7]. While denying plans for mass layoffs, the government intends to reallocate staff to address shortages in healthcare and police services [1][2][3][5][7]. The budget documents were submitted to the National Assembly on 3 October 2026, missing the legal deadline of 1 October 2026 [3][5]. The government finalized the approval on 4 October 2026, following the delayed submission [1][2][3][4][5][6][7][8].

Economic Outlook and IMF Forecasts

The International Monetary Fund forecasts Slovenia’s GDP growth at 2.2% for 2027, supporting the government’s optimistic economic outlook [3][4]. Additionally, municipal funding per capita is set to increase by €10 in 2027, reaching a total of €845 per resident [3][4].

Sources

Fiscal Policy Slovenia Budget