Czech budget deficit rose to historic CZK 279.4 billion high in July

The Czech Republic’s budget deficit rose from June’s CZK 265.1 billion to CZK 279.4 billion in July, the Ministry of Finance announced on Monday. This is the highest July deficit rate yet in the modern history of the Czech Republic, surpassing the CZK 205.1 billion deficit registered in July 2020.

Although state budget income experienced a CZK 19.3 billion year-on-year rise in July to CZK 836.3 billion, expenditures saw a year-on-year rise by CZK 93.6 billion to reach a total of CZK 1.1 trillion.

The rise in the budget deficit is down to a variety of factors according to the Finance Ministry. They include limitations on economic activity through counter-epidemic measures during the first quarter of 2021, which decreased state income from taxes, as well as state expenditure on various recovery and economic support measures for the business, social and health sectors. State income has also fallen due to the lowering of taxes on labour, capital and property, and greater allocations to regional budgets.

Nevertheless, economists questioned by the Czech News Agency highlighted that the growth of the budget deficit has been slowing down over the past two months. Therefore, they do not expect the deficit to reach the CZK 500 billion maximum that was approved by Parliament.

Author: Tom McEnchroe