Czech government deficit rises to 3.7% of GDP in first quarter of 2025

by   CIJ News iDesk III
2025-07-03   07:54
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The Czech Republic’s general government sector recorded a deficit equivalent to 3.7% of GDP in the first quarter of 2025, according to data published by the Czech Statistical Office (CZSO). Government debt rose slightly to 43.4% of GDP.

The overall deficit amounted to CZK 73.6 billion, representing a year-on-year increase of CZK 10.7 billion. The central government contributed significantly to the shortfall, posting a deficit of CZK 105.7 billion, CZK 12.0 billion higher than the same period last year.

In contrast, the local government sector reported a surplus of CZK 33.8 billion, though this was CZK 0.5 billion lower year-on-year. Social security funds, including health insurance institutions, recorded a deficit of CZK 1.7 billion.

“In the first quarter of 2025, the general government sector ended with a deficit of CZK 73.6 billion, corresponding to 3.7% of GDP. The government debt ratio increased by 0.3 percentage points compared to the previous year,” said Helena Houžvičková, Director of the Government and Financial Accounts Department at CZSO.

Government revenues grew by 4.5% year-on-year, reaching 39.8% of GDP. This increase was driven primarily by higher social contributions and taxes on production and imports. Meanwhile, government expenditure rose by 5.5% year-on-year to 43.5% of GDP, with higher spending noted in employee compensation, social benefits, and subsidies.

The nominal value of government debt rose by CZK 202.0 billion year-on-year to a total of CZK 3,539.1 billion. The debt-to-GDP ratio edged up from 43.1% to 43.4%. Nominal debt growth added 2.5 percentage points to the ratio, but this was partially offset by a higher nominal GDP, which reduced indebtedness by 2.2 percentage points.

On a quarter-on-quarter basis, government debt increased by CZK 47.2 billion. While nominal debt growth contributed an increase of 0.6 percentage points, the rise in nominal GDP reduced the ratio by 0.5 percentage points, resulting in a net quarterly increase of 0.1 percentage points.

A significant year-on-year increase was observed in issued debt securities, which rose by CZK 144.7 billion.

After seasonal and calendar adjustments, the government sector balance showed a deficit of CZK 46.4 billion, equal to 2.2% of GDP. This adjusted balance deteriorated by CZK 6.8 billion compared to the previous quarter.

Source: Czech Statistical Office

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