President Petr Pavel has signed the state budget for 2024, which projects a CZK 241 billion deficit, after careful consideration and discussions with Prime Minister Petr Fiala and Finance Minister Zbyněk Stanjura. The president acknowledged his reservations about the budget, citing concerns over the realism of some projected revenues and expenditures. However, he emphasized that his decision was in the best interest of the country and its citizens. “I did not make this decision lightly. While I had serious reservations, the guarantees provided by the government to maintain the deficit at the planned level and adhere to the Budget Responsibility Act were key to my decision,” Pavel said in a social media address. He added that the government now bears both political and moral responsibility for fulfilling these commitments. Key Budget Figures and Priorities The 2024 budget reflects a CZK 41 billion reduction in the deficit compared to this year’s adjusted budget. It anticipates: • Revenue increase of CZK 146 billion compared to 2023, • Expenditure increase of CZK 105 billion, • The deficit primarily funded through a CZK 248 billion rise in national debt. The government’s priorities include: 1. Consolidating public finances, 2. Strengthening investments, 3. Addressing the aftermath of recent floods, 4. Maintaining social stability. Finance Minister Zbyněk Stanjura described the budget as “realistic and socially stabilizing,” while Prime Minister Petr Fiala called it “a reasonable compromise.” Economic advisors to the president, including economist David Marek, expressed skepticism about the budget, referencing concerns raised by the National Budget Council (NRR). Among these were potentially overestimated revenues, particularly from the sale of emission allowances. Despite these reservations, Pavel acknowledged the government’s commitment to fiscal consolidation and appreciated the inclusion of significant investments and adherence to defense commitments. “The government has made an effort to avoid wasteful spending, even in an election year,” he noted. The NRR has repeatedly called for continued budget reforms to meet fiscal targets under the Budget Responsibility Act. While current measures are projected to suffice until 2026, further structural reforms will be needed in subsequent years. During parliamentary discussions, CZK 3 billion was reallocated within the budget, with key adjustments including: • CZK 700 million for water management infrastructure, • CZK 1 billion for police and fire brigade salaries, • Over CZK 500 million for judiciary employee salaries, • CZK 60 million for investments in Prague Castle’s infrastructure and security, which includes facilities used by the president. While Pavel has signed the budget, he stressed the need for ongoing reforms to ensure long-term fiscal stability. “The measures taken so far are a start, but they will not suffice in the future. Continued efforts and reforms will be necessary to achieve sustainable public finances,” he said. The 2024 budget represents a significant step in balancing the need for fiscal responsibility with investment and social priorities, but it also highlights the challenges and complexities of managing public finances in a period of economic uncertainty. Source: CTK