In a late-night session, the Czech Chamber of Deputies has passed the state budget for the upcoming year, revealing a planned deficit of CZK 252 billion. The budget, supported by votes from the ruling coalition parties, marks a CZK 43 billion reduction from the current year’s deficit. Prime Minister Petr Fiala’s five-party coalition government has successfully pushed through its third state budget.

The approved budget will now be forwarded to President Petr Pavel for official signing into law, as the Senate does not handle budgetary matters. Out of the 181 MPs present for the vote, 98 from the ruling coalition, along with Ivo Vondrak, an independent MP originally elected for ANO, voted in favor, while opposition MPs opposed the budget.

Before the final vote, MPs greenlit 13 transfers within the budget totaling CZK 2.7 billion, including a significant CZK 1.1 billion allocated to support the water management sector. Opposition proposals for funding transfers were not accepted.

Additionally, the lower house approved a transfer of CZK 12.2 million to designated “memory institutions,” including the Masaryk Democratic Movement, the Czechoslovak Legionary Community, and the Society for the Preservation of the Legacy of the Czech Resistance. Another approved proposal directed CZK 120 million towards the restoration of the Bohemian fortress towns of Terezin and Josefov.

The 2024 budget operates on the assumption of 2.3% economic growth and a 3.9% increase in household consumption, driven by a projected rise in real incomes. The average inflation rate is expected to decrease to 2.8% from the current year’s 10.9%.

Finance Minister Zbynek Stanjura (ODS) defended the budget, emphasizing responsible spending. Notable allocations include a year-on-year increase of CZK 3.9 billion for education, raising its share in total budget expenditure to 12%, and a CZK 5.1 billion boost for health, increasing its share from 7.2% to 7.5%.

Despite opposition attempts, proposals like removing CZK 30 billion from the EU budget or allocating funds to address higher energy prices were unsuccessful. The government’s priorities for the budget focus on maintaining social peace, stable healthcare financing, competitive teachers’ salaries, and defense spending at 2% of GDP. Prime Minister Fiala highlighted the rise in teacher salaries and pensions, stating that the government is cutting back on state expenses while making the budget more sustainable. Opposition figures, including former Prime Minister Andrej Babis, criticized the budget for allegedly undermining the country’s prosperity.

Article by Prague Forum