The Czech Republic’s Ministry of Finance has presented the government the draft 2025 budget that reduces the deficit by 9% on 1 September 2024.
The proposal promises significant investments while reducing the fiscal gap to 2% of the gross domestic product (GDP).
The budget draft projects a deficit of CZK 230 billion (USD 10.2 billion), reduced from an initially planned gap of CZK 252 billion with a forecasted fiscal shortfall of 2.5% of GDP for this year. It also projects a CZK 146.1 billion increase in income and a CZK 124.1 billion rise in spending.
“We have prepared a budget draft for next year in which there is the most money historically for investment and at the same time we are cutting the deficit to GDP to a level around 2%,” Prime Minister Petr Fiala said on X on 1 September 2024.
The draft proposes maintaining defence spending at 2% of GDP, increasing teacher salaries, and allocating additional billions for investments.
Finance Minister Zbynek Stanjura said there are no plans to end the windfall tax on energy companies and banks, which is slated to expire at the end of 2025.
The government is set to discuss the budget, potentially reallocating funds among departments, before presenting a final draft to parliament by the end of September.
