Czech Finance Ministry proposes 2024 state budget with $11.3 billion deficit

PRAGUE (Reuters) – The Czech Finance Ministry has proposed a 2024 central state budget with a 252 billion crown ($11.36 billion) deficit, according to a draft of the legislation sent to the government and released on Friday.

The deficit is below this year’s target of 295 billion but above an earlier proposed gap of 235 billion.

The draft may still be amended following discussions in the cabinet prior to submission to parliament by the end of September, but the ministry said the overall deficit figure should be maintained.

The ministry said revenue was seen at 1.92 trillion and expenditure at 2.17 trillion.

The proposal is based on a package of tax hikes and savings measures now being discussed in parliament that are aimed at reducing the deficit by around 100 billion crown.

Czech government finances have been dented by subsidies and an economic downturn during the coronavirus pandemic, subsidies to limit the impact of last year’s energy crisis following Russia’s invasion of Ukraine and weak economic output that has still not exceeded pre-COVID levels.

The ministry said the budget proposal reflected legislation mandating growth in defence spending to 2% of gross domestic product.

Prime Minister Petr Fiala told a news conference on Friday that he expected the overall public sector deficit to drop to around 3% of gross domestic product next year, compared with the Finance Ministry’s forecast of 3.6% this year.

($1 = 22.1830 Czech crowns)

(Reporting by Jan Lopatka; Editing by Alex Richardson)