Government expects higher budget deficit next year

The Czech government plans to run a higher state budget deficit next year, than the 310 billion crowns currently projected for 2026, Finance Minister Alena Schillerová told Czech Television.

According to Schillerová, the deficit should then gradually decline in subsequent years by around half a percentage point of GDP annually.

The Finance Ministry also expects defence spending to reach two percent of GDP next year. The Czech Republic is currently negotiating changes to its fiscal-structural plan with the European Commission.

The existing framework, agreed under the previous government of Petr Fiala, envisages reducing the public finance deficit to 0.9 percent of GDP by 2027 and 0.5 percent the following year. Schillerová described those targets as unrealistic.