Babiš promises Czech budget deficit will be noticeably below 400 billion crowns

The Czech state budget deficit for next year should be noticeably below 400 billion crowns, Prime Minister Andrej Babiš said ahead of talks with ministers on the budget's parameters.

According to the prime minister, the government has already notified the European Commission that next year's structural deficit in public finances will not exceed 2.9% of GDP, compared with the current 2.4% of GDP this year. "So it's clear the deficit should be significantly below 400 billion. We are, of course, asking ministers to economize, cut current spending, and do so rationally," Babiš said.

He added that the cabinet wants the deficit to be as low as possible, but at the same time the state needs to invest in development.

The government expects to start meaningfully reducing budget deficits only in the second half of the electoral term. For now, the cabinet intends to focus on investments that are expected to spur economic growth.

The opposition and some economists oppose the growth of public debt. They point out that the amount the state spends annually on servicing its debt keeps rising, and while the country's debt remains relatively low, it has been on a dangerously steep upward trajectory in recent years. This is also linked to the cabinet's push to ease budget rules, which President Petr Pavel recently vetoed.

As of mid this year, the budget deficit had reached 183.6 billion crowns. Public debt has risen to 3.727 trillion crowns, meaning every resident of the country — including infants and pensioners — carries a debt burden of 342,034 crowns.

Source: novinky.cz