Budget council warns Czech deficit could exceed 350 billion crowns next year

The Czech National Budget Council has warned that next year's state budget deficit could exceed 350 billion crowns, significantly higher than this year's planned shortfall of 310 billion crowns. In its quarterly assessment, the independent fiscal watchdog said the government could also breach the European Union's three-percent deficit limit by using a special exemption for increased defence spending. The council also criticised proposed changes to Czech fiscal rules, arguing they would weaken national budget discipline. It further warned that rising government bond yields are increasing borrowing costs and could push debt-servicing expenses to around 1.6 percent of GDP in the coming years.