The Czech state budget deficit will deepen next year from this year's planned 310 billion crowns but will not exceed 400 billion crowns, Finance Minister Alena Schillerová said after three days of negotiations with coalition ministers, adding that she could not satisfy all spending demands. Analyst Dominik Rusinek at Patria Finance estimates the shortfall at roughly 360 billion crowns.
Prime Minister Andrej Babiš said fiscal consolidation can begin only once the country has modernised hospitals, completed its transport network, and secured higher pay for soldiers and police. Defence spending is set to reach 191 billion crowns, meeting NATO's two-percent-of-GDP target for the first time, while education funding will approach 300 billion crowns.
The government submitted a fiscal-structural plan to the European Commission projecting a structural deficit of at most 2.9 percent of GDP next year, as national debt is forecast to climb to 45.8 percent of GDP this year, up from 44.2 percent. Public-sector workers could see one of the largest wage increases in years starting in January, Labour Minister Aleš Juchelka said, after the cabinet already moved to raise pensions beyond the statutory indexation.