The state is expected to run a deficit of CZK 241 billion in 2025. Dynamic growth in expenditure by CZK 105 billion and the stagnation of the cyclical balance mean that no significant consolidation is taking place. The budget can therefore be described as pre-election. In addition, the irregularities in the draft amount to almost CZK 70 billion. The problematic consolidation of public finances under the currently valid rules can only be expected in the period after 2026.

Key Takeaways:

• State budget revenues for 2025 are planned at CZK 2,086.1 billion. This represents an annual increase of 6.6% (CZK 120.4 bn).
• Expenditures increase by CZK 105 billion year-on-year to an unprecedented CZK 2,327.1 bn.
  of this amount, mandatory and quasi-mandatory expenditure will amount to CZK 1,796.9 billion.
• Discrepancies in the submitted proposal on the revenue and expenditure sides amount
  to almost CZK 70 billion.
• Significant budgetary consolidation will take place after 2026.

Analysis – Martin Zeman

The analysis is in PDF under the link below.