The Chamber of Deputies last night approved the state budget for next year, which envisages a deficit of CZK 241 billion, with the votes of MPs from the ruling coalition.
Compared to this year’s adjusted budget, the deficit will fall by CZK 41 billion. Revenues will increase by CZK 146 billion from this year’s budget and spending will increase by CZK 105 billion compared to the revised budget. The bulk of the deficit will be covered by a CZK 248 billion increase in the national debt. The opposition has criticised the budget.
A total of 98 MPs from the ruling coalition voted in favour of the budget, joined by unaffiliated MP Ivo Vondrak, originally elected for the opposition ANO. Opposition MPs voted against, including the Pirates who recently left the government.
The MPs voted on money transfers within the budget, adding more than half a billion crowns for the salaries of employees in the judiciary. They also added CZK 700 million for water infrastructure. Within the Interior Ministry budget, they added over CZK 1 billion for police and fire service salaries.
The budget will now be presented to President Petr Pavel for his signature. The Senate is not involved in approving the budget. According to his earlier statements, the president still wants to meet the prime minister and finance minister to discuss the budget, as his economic advisers have reservations about some of the items in it.
The government has identified the main priorities of the budget as consolidating the public finances, boosting investment, and dealing with the consequences of the recent floods. It also considers maintaining social reconciliation to be another priority.
Prime Minister Petr Fiala (ODS) described the budget as a more than reasonable compromise in the first reading, while the opposition criticised the budget.
Finance Minister Zbynek Stanjura (ODS) described it as realistic during the first reading, and said it would contribute to social reconciliation. Today, he said he stood by his words. He also stressed that on the revenue side of the budget he had the opinion of the independent committee for budget forecasts. According to him, the revenue forecasts are realistic. “It is a really good budget,” he said.
The budget envisages a 2.7% growth in the economy, 3.9% growth in household consumption, and a decline in the average inflation rate to 2.3%.
