PRAGUE (Reuters) – The Czech finance ministry has presented a draft budget for 2025 with a 9% lower deficit to the government, saying it would bring record investment while narrowing the fiscal gap to around 2% of gross domestic product.
The draft budget, presented at midnight on Saturday, projects a deficit of 230 billion crowns ($10.2 billion), down from a planned gap of 252 billion crowns and an expected fiscal gap of 2.5% of GDP this year.
“We have prepared a draft budget for next year that includes the largest amount of money in history for investment and at the same time we are reducing the deficit in GDP to a level of around 2%,” Prime Minister Peter Fiala said on the X platform on Sunday.
The finance ministry and government officials said the plan includes maintaining defense spending at the country’s NATO commitment of 2 percent of GDP, increasing teachers’ salaries and tens of billions more for investments.
Finance Minister Zbynek Staniora said last month he would not propose an early end to the windfall tax on energy companies and banks next year, which has mainly hit electricity producer CEZ and is due to expire at the end of 2025.
The budget forecasts an increase in income of SEK 146.1 billion and an increase in spending of SEK 124.1 billion.
The ministry expected economic growth to rise next year to 2.7% after lowering its forecast for this year to 1.1%, amid a slow recovery from high inflation that has affected households.
The government will discuss the budget, during which money can be transferred between ministries, before presenting the final version to parliament by the end of September.
The Pirate Party, a junior member of the five-party centre-right ruling coalition, told news agency CTK on Sunday it would seek more money for housing, calling the current bill unacceptable.
The Czech government has set itself on a steady consolidation path since the deficit hit a record 420 billion crowns in 2021 following the global Covid pandemic, while energy price hikes after Russia’s invasion of Ukraine in 2022 have led to increased spending on aid to affected people and businesses.
The 2023 budget deficit is around SEK 288.5 billion.
(1 dollar = 22.6480 Czech crown)
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