Czech government approves 2025 budget with increased deficit of CZK 241 billion

The Czech government has approved a draft budget for the upcoming year, featuring a significant deficit of CZK 241 billion. This represents an increase of CZK 30 billion from the previously projected deficit of CZK 211 billion, primarily due to additional funding for flood recovery efforts and increased support for universities.

Finance Minister Zbyněk Stanjura announced the budget details following a Cabinet meeting, noting that the deficit is higher by CZK 11 billion compared to the original proposal submitted by the Ministry of Finance in August. Of this increase, CZK 10 billion will be allocated for the removal of damage caused by recent floods, while CZK 1 billion will support higher education institutions.

This year, the government anticipates managing a deficit of CZK 282 billion, which has been adjusted upward by CZK 30 billion due to the financial impact of the floods. The projected revenue for the 2025 budget is set at CZK 2.086 trillion, marking a 7.5 percent increase over this year’s figures, while the planned expenditure will amount to CZK 2.327 trillion—up 4.7 percent from the amended budget for the current year.

Stanjura acknowledged that the draft budget did not receive unanimous support within the government, a reflection of the current political climate. The budget discussions have been complicated by recent political shifts, including the dismissal of Ivan Bartoš, the chairman of the Pirate Party, from his role as Minister of Regional Development. Following this development, the Pirate Party announced its decision to exit the government coalition. Despite the lack of consensus, Stanjura confirmed that no ministers voted against the budget proposal.

In addition to the overall deficit increase, the approved budget reallocates approximately CZK 10 billion across various departments, including a planned five percent salary increase for state employees. Stanjura also highlighted a significant growth in capital expenditure, projecting a 35.9 percent increase to CZK 250.8 billion, indicating a record level of investment activity for the government.

Furthermore, expenditures from the Ministry of Labour and Social Affairs are set to rise, in line with the approved pension valorization. The government remains committed to fulfilling its legal obligation to allocate two percent of the country’s Gross Domestic Product (GDP) to defense expenditures.

The draft budget must be submitted to the Chamber of Deputies by the end of September, with discussions expected to commence in October. The final vote on the budget is typically scheduled for December, after which it will require the president’s approval to become law. The Senate has yet to comment on the proposed budget.

Source: CTK