Page 48 - CE Outlook Regions 2024

4.0 Budget and debt outlook 4.1 Budget and debt - Czech Republic
In October Parliament approved an austerity package aimed at lowering the budget deficit by CZK150bn (€6.1bn) over the next two years. Czech state debt reached 43.1% of GDP at the end of Q3, increasing by 0.4% in 2023. EC projected the gradual lowering of the general government balance from -3.8% of GDP this year to -2.4% in 2024 and -1.8% in 2025.
The state budget ended with a deficit of CZK288.5bn in 2023, which was the fourth deepest deficit in the country’s history but the lowest one since the COVID-19 pandemic. It was also slightly less than the approved deficit for 2023 of CZK295bn. The overall budget income was CZK1.914 trillion, which is an increase of 17.8% y/y. Expenses were CZK2.203 trillion.
The windfall tax income amounted to CZK39.1bn and the income from the tax on excessive profits from electricity production was CZK18.5bn, which is below the CZK100bn Ministry of Finance income projection for 2023 from these measures.
Parliament approved the budget for 2024 with a deficit of CZK252bn (€10.2bn), which is a y/y drop of CZK43bn. The overall budget income will increase to CZK1.94 trillion, while the expenditures will drop to CZK2.19 trillion. The budget is based on a projection of domestic economic growth of 2.3% and on a growth of household consumption by 3.9%. The budget calculations also expect inflation to drop to 2.8% in 2024.
Czech state debt was at CZK3.115 trillion at the end of third quarter of 2023, reaching 43.1% of GDP - a 0.4% increase y/y. The debt was CZK3.111 trillion at the end of December 2023, up from CZK2.895 trillion at the end of December 2022.
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