The Czech Republic concluded the fiscal year 2023 with a budget deficit of 288.5 billion crowns, marking the fourth-largest deficit in the nation’s history. Finance Minister Zbyněk Stanjura noted that this represented a decrease of 71.9 billion crowns from the 2022 state budget deficit, reflecting shifts in financial dynamics.

The state budget revenues for the year experienced a notable increase, surging by 289.7 billion crowns, equivalent to a 17.8 percent rise, reaching a total of 1.914 trillion crowns. Simultaneously, total expenditures grew by 217.8 billion crowns, marking an 11 percent year-on-year increase and reaching 2.203 trillion crowns. The Ministry of Finance indicated that the deficit of 288.5 billion was lower than the anticipated deficit of 295 billion outlined in the approved budget plan.

Despite implementing tax increases and austerity measures, the government is set to continue operating with a substantial budget deficit in the current year. President Petr Pavel signed the state budget for 2024 with a projected deficit of 252 billion crowns before Christmas. The budget for this year foresees an increase in planned revenues by 12 billion crowns compared to the previous year, reaching 1.94 trillion.

Conversely, planned expenditures for 2024 are expected to decrease by 31 billion crowns to 2.19 trillion crowns. The budget’s foundation rests on the assumption of a 2.3 percent economic growth rate, with renewed growth in household consumption contributing to this projection.

The expected average inflation rate is slated to decrease from 10.9 percent in the previous year to 2.8 percent. The budget also incorporates provisions for an increase in the average teacher’s salary to 52,400 monthly crowns in 2024. Additionally, the average retirement pension has risen to 20,635 crowns since January.

However, the state debt service costs are set to increase by approximately 25 billion year-on-year to 95 billion crowns in 2024, reflecting ongoing challenges and financial commitments faced by the Czech Republic.

Article by Prague Forum