Czech Republic’s State Budget Deficit in Review

The state budget of the Czech Republic ended with a deficit of 288.5 billion crowns last year, making it the fourth-largest deficit in history. According to Finance Minister Zbyněk Stanjura, this represents a decrease of 71.9 billion crowns from the 2022 state budget deficit.

State budget revenues for 2023 increased by 289.7 billion crowns, or 17.8 percent, reaching 1.914 trillion crowns. Total expenditures increased by 217.8 billion (or 11 percent) year-on-year, reaching 2.203 trillion crowns. The Ministry of Finance reported that the approved plan for last year’s budget anticipated a deficit of 295 billion.

Despite tax increases and austerity measures, the government will continue to operate with a large budget deficit this year. President Petr Pavel signed the state budget for this year with a deficit of 252 billion crowns before Christmas. The planned revenues for this year’s budget are expected to increase by 12 billion crowns compared to last year’s approved budget, reaching 1.94 trillion.

Planned expenditures, on the other hand, are expected to decrease by 31 billion crowns to 2.19 trillion crowns. The budget is based on the assumption of 2.3 percent economic growth. The renewed increase in actual household consumption should also support the growth.

The average inflation rate is expected to decrease from 10.9 percent this year to 2.8 percent. The budget also considers that the average teacher’s salary will increase to 52,400 monthly crowns this year. The average retirement pension has risen to 20,635 crowns since January. This year, the state debt service costs will increase again by approximately 25 billion year-on-year to 95 billion crowns.