The Czech Republic’s state budget recorded a deficit of CZK 181.7 billion at the end of September. After accounting for income and expenditure related to European Union projects and financing mechanisms, the deficit totaled CZK 188.2 billion.
Despite this high deficit, there was a slight improvement compared to the previous year. Excluding EU funds and financing mechanisms, the deficit is CZK 23.5 billion lower than last year. This improvement was primarily driven by a nearly 6% increase in tax and insurance revenues. Despite a significant rise in obligatory payments, such as servicing government debt, budget expenditures rose only slightly, by 0.6% compared to the previous year.
Finance Minister Zbyněk Stanjura expressed cautious optimism, stating: “Apart from the floods, based on the results of the last nine months, there is a high probability that we will reach the approved deficit of CZK 252 billion.”
However, the flood disaster that hit large parts of the country in September imposes an additional burden on the budget. Consequently, the government has requested an amendment to this year’s state budget to increase spending by CZK 30 billion. This is likely to raise the total deficit for the year to CZK 282 billion.
“The aid will be passed on to citizens, companies, and, of course, regional and municipal budgets. The districts have until 20 October to assess the flood damage. We are already preparing the instruments to address this damage and will determine the allocations for repairing the damage to the funding programs of individual ministries afterward. We cannot ask citizens and businesses to wait for next year’s budget. Reconstruction aid must reach the areas affected by the flood disaster as quickly as possible. That is why the House of Commons approved an amendment to this year’s budget today,” added Minister Stanjura.
