The Czech Statistical Office (ČSÚ) has confirmed that in 2024, the general government recorded a deficit equivalent to 2.2 % of GDP, with total public debt reaching 43.6 % of GDP. In the first quarter of 2025, the fiscal picture has weakened: the government posted a deficit of CZK 73.6 billion, or 3.7 % of GDP, compared to the same quarter in 2024. Meanwhile, labour market data for Q2 2025 show modest employment gains, rising economic activity, and one of the region’s lowest unemployment rates. According to the ČSÚ’s notification to Eurostat, the 2024 budget deficit amounted to CZK 177.2 billion, down from more than CZK 285 billion the year before. Revenues grew by 6.8 % year on year, driven by increases in social contributions, income taxes and taxes on production and imports. Expenditures rose by 2.9 %, with social benefits showing the largest increases and subsidies decreasing. The central government was the main driver of the deficit, while local governments posted a surplus and social security funds recorded a deficit. In Q1 2025, the deficit deteriorated compared to the same period in 2024 by about CZK 10.7 billion. Revenues for the quarter rose by 4.5 % year on year, reaching 39.8 % of GDP, while expenditure increased 5.5 %, to 43.5 % of GDP. The rise was largely due to higher wages for government employees, rising social benefits, and increased subsidies. Over the same period, public debt rose to CZK 3,539.1 billion, lifting the debt-to-GDP ratio from 43.1 % to 43.4 %. On the movement in debt, the ČSÚ reports that issued debt securities contributed the most to the increase, with a year-on-year rise of CZK 144.7 billion. Both nominal GDP growth and debt issuance influenced the ratio’s increase; nominal GDP growth moderated the upward pressure, but debt growth overwhelmed it. Turning to the labour market, the ČSÚ’s Q2 2025 Labour Force Survey reveals that employment increased by 76,200 persons (1.5 % year on year), bringing the total number of employed to 5,243,500. Interestingly, female employment rose by 122,600, while male employment declined by 46,500 — a shift influenced by structural changes and the continued integration of Ukrainian women into the Czech labour force. Older workers (60+) recorded the largest absolute gains, contributing 52,200 to the increase. The services sector accounted for most of the job growth, especially in arts, entertainment and recreation. The survey also notes that despite the rise in unemployment figures in absolute terms, the unemployment rate remains very low by European standards. The increase in both employment and unemployment suggests that more people entered the labour force, strengthening overall economic activity. Economists warn that the fiscal deterioration in early 2025 may test Czechia’s ability to maintain responsible public finances, especially given plans to continue supporting defence spending and public sector wages. Meanwhile, the labour market’s tightness and growth in participation provide a supporting narrative for continued domestic demand and resilience in the Czech economy. Source: ČSÚ