Government Approves State Budget For 2023 With CZK 295 Billion Deficit
The expenditure frameworks approved today project the 2024 and 2025 budget deficit at CZK 280 and 260 billion, respectively. Photo Credit: vlada.cz
Prague, Sept 27 (CTK) – The Czech government yesterday approved the state budget for 2023, with a deficit of CZK 295 billion, Finance Minister Zbynek Stanjura (ODS) told reporters after the cabinet meeting.
The biggest change from the original draft, which had a deficit of CZK 270 billion, is the extra spending on capping electricity and gas prices. This should be covered by revenues from the windfall tax and payments from the sale of electricity above the price ceiling approved by the European Commission (EC).
The state budget bill will now be sent to the Chamber of Deputies, the lower house of Czech parliament, for debate.
The draft budget projects revenues of CZK 1,928 billion and expenditures of CZK 2,223 billion. Compared to the original bill from early September, projected revenues have risen by CZK 179 billion and expenditures by CZK 204 billion.
The major change in expenditures is the CZK 100 billion required to cap electricity and gas prices, which is to be compensated by revenues of CZK 100 billion that the government expects to raise from the windfall tax imposed on large firms in the energy and mining sector, oil industry and banking, and from the 100% payments from power producers for the sale of energy above the price ceiling set by the EC at 180 euros per megawatt hour.
The Finance Ministry warns, however, that the expected revenues and expenditures connected with energy prices are only very rough estimates, subject to significant uncertainty due to strong fluctuations on the electricity spot market. However, the development of energy prices will affect the budget revenues and expenditures in the same direction.
As against the original budget draft for next year, expenditures have also increased by CZK 23 billion due to the rise in salaries in the public sector. The Transport Ministry will also get an additional CZK 29 billion for investments in transport infrastructure. The Regional Development Ministry’s budget allocation will be raised by CZK 5.5 billion and the Culture Ministry’s by CZK 4.1 billion.
This year’s budget has been approved with a deficit of CZK 280 billion. However, the Chamber of Deputies is currently debating an amendment that would raise the deficit to CZK 330 billion.
The expenditure frameworks approved today project the 2024 and 2025 budget deficit at CZK 280 and 260 billion, respectively.