The state budget deficit rose to almost CZK 271 billion at the end of September

Milan Malíček

At the end of September, the state budget deficit rose to CZK 270.9 billion, from CZK 231.1 billion in August. The Ministry of Finance (MoF) announced this on Monday. Last year, the budget deficit at the end of September was CZK 326.3 billion, which was the worst September result since the Czech Republic was founded.

Total budget revenues increased 8.2 percent year on year to CZK 1.168 trillion at the end of September. Year on year, spending increased by 2.4 percent to CZK 1.439 trillion.

According to the MoF, tax revenues increased 15.1 percent yearly. At the same time, expenditure was boosted by extraordinary pension indexation, a contribution to household energy costs, increased housing and material need benefits, a one-time child allowance, and humanitarian aid.

In March, the House of Commons approved this year’s budget with a deficit of CZK 280 billion. In the summer, the government proposed an amendment to the budget that foresees a deficit of CZK 330 billion on revenues of CZK 1.678 trillion and expenditures of CZK 2.008 trillion. But during the debate in the lower house, government MPs proposed a further increase in the deficit by CZK 45 billion, with a vote on the amendment expected this month.

“The budget deficit widened to nearly CZK 271 billion in September, close to the originally proposed deficit. Although we are currently 55 billion better off than last year, the deficit is still miles away from my idea from the beginning of the year,” commented Finance Minister Zbyněk Stanjura (ODS).

According to him, the budget now fully reflects the additional expenses related to the war in Ukraine and rising energy prices.

At the end of September, value-added tax collections increased by 18.3 percent yearly to CZK 247 billion. Corporate income tax receipts increased 16.4% to CZK 120.1 billion. Personal income tax collections increased by 14.2 percent to CZK 86.7 billion, and the state collected CZK 115 billion in excise duties, up 8.5 percent yearly.

On the expenditure side of the budget, current expenditure increased by 1.6 percent to CZK 1.326 trillion. Capital expenditure grew by 13.2 percent year on year to CZK 112.8 billion. By September, the state had paid out CZK 571.2 billion in social benefits, an increase of 9.6 percent yearly. Of this, CZK 436 billion went to pensions.