At the end of July, the government approved an amendment to this year’s budget with a deficit of 330 billion crowns. In March, the House of Representatives approved this year’s budget with a deficit of 280 billion crowns. Deputies should discuss the budget amendment in September. The government has a majority of 108 out of 200 votes in the lower house, so it can be assumed that the draft budget will pass.
At the end of August, total budget revenues rose by 8.1 percent year-on-year to 1.023 trillion crowns. Total budget expenditures increased by 0.8 percent year-on-year to CZK 1.254 trillion. According to the Ministry of Finance, the income side was helped by tax revenues, which were 15.5 percent higher year-on-year, while expenses, on the other hand, were deepened by extraordinary valorization of pensions, increased benefits for housing and material needs, a one-time allowance for a child or humanitarian aid.
“On the expenditure side, we have additional costs for extraordinary pensions and social benefits to help groups of citizens threatened by rising prices. Even so, in recent months we have been following a positive trend of significantly increasing capital expenditure, which is currently almost 20 percent stronger than last year, unsurprisingly with the largest share in transport infrastructure,” said Finance Minister Zbyněk Stanjura (ODS).
The most massive indebtedness within the EU continues. The state is planning another huge budget deficit
Tax revenues, including insurance premiums, contributed the most to revenue growth (by 11.1 percent), with a positive contribution mainly from value added tax, insurance premiums and corporate income tax. Conversely, revenues from the European Union and financial mechanisms fell by 11.4 percent. The year-on-year comparison was distorted by last year’s revenue from the frequency auction (CZK 5.6 billion).
Current expenditures were lower by 0.5 percent year-on-year, despite the increase in the living and subsistence minimum, housing allowances, the extraordinary valorization of all pensions or other social benefits and expenses related to solidarity aid to refugees. In particular, payments for anti-epidemic aid were lower. Conversely, capital expenditures exceeded last year’s figure by 19.4 percent. Pension payments (8.1 percent), increased by the January and June valorization, contributed the most to the most significant social benefits in terms of volume, with growth of eight percent.
First in debt
Last year, the Czech Republic was the fastest-growing country in the European Union, the Supreme Audit Office (NAO) stated a few days ago.
The report on the indebtedness of the Czech Republic triggered a sharp new firefight between the government and ANO
“Although the Czech Republic remained one of the least indebted countries in the European Union, it was also the country with the fastest increase in debt year-on-year,” said the SAO.
At the same time, the Office drew attention to the fact that while 20 EU countries were able to reduce their debt to GDP year-on-year last year, the Czech Republic, on the other hand, increased it by more than four percentage points.