Czech Government Unearths Additional Savings to Maintain State Budget Deficit Below 300 Billion CZK

The Czech government has successfully identified further savings to ensure that this year’s state budget deficit remains below 300 billion Czech koruna (CZK), as revealed by Zbyněk Stanjura, the head of the state treasury from the ODS party. A substantial portion of these savings, over 10 billion CZK, is expected to come from reductions in operational expenses across various ministries, reflecting a concerted effort to keep the budget deficit within the planned threshold.

Individual ministers have been actively cutting operational expenses in their respective departments for several months, with an emphasis on reducing subsidies and scaling back unrealized investment projects.

Petra Vodstrčilová, a spokesperson for the Ministry of Finance, stated, “In the area of operational expenses alone, the Ministry of Finance expects savings of more than ten billion for the whole year,” emphasizing the commitment to maintain the budget deficit at the targeted 295 billion CZK.

Operational expenses accounted for 59.4% of state expenditures by the end of the third quarter, which falls short of the ideal 75% expenditure by this time. The government remains focused on finding additional savings within the current fiscal year, including operational expenses, salary volumes, and national subsidies, with the aim of achieving savings between 15 to 20 billion CZK.

While specific savings amounts within individual ministries are generally not disclosed, some ministries have provided insights into their cost-cutting measures. For example, the Ministry of Foreign Affairs has reduced its budget by curtailing energy consumption, trimming business trips, and closing consulates and embassies.

Similarly, the Ministry of Regional Development has been working on decreasing overall energy consumption, particularly by transitioning to energy-efficient lighting and exploring the possibility of not filling vacant positions.

The Ministry of Education has reported savings resulting from government decisions to reallocate funds from its budget chapter to the Ministry of Labour and Social Affairs and to return unutilized funds for vacant positions.

The Ministry of the Interior saved approximately 200 million CZK due to fewer-than-expected departures from security forces, and the Ministry of Agriculture predicts operational savings in the hundreds of millions CZK this year.

Moreover, the government suspended subsidies to food companies in May, which was initially slated for the following year, resulting in savings of 230 million CZK. In October, the government bolstered the budget by canceling approved support for heating plants amounting to 17 billion CZK, originally intended to lower heat prices for customers. The Ministry of Industry’s subsidy program will see reduced state subsidies for renewable sources in the next budget year.

These concerted efforts to uncover additional savings will help maintain fiscal discipline and keep the state budget deficit within manageable limits, providing financial stability for the Czech Republic.

Article by Prague Forum

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