FILE PHOTO: Czech Republic’s Prime Minister Andrej Babis arrives for the informal meeting of European Union leaders in Sibiu, Romania, May 9, 2019. REUTERS/Francois Lenoir
May 20, 2019
PRAGUE (Reuters) – The Czech government will stick to plans for a 40 billion crown ($1.73 billion) central government budget deficit in 2020, unchanged from its 2019 target, Prime Minister Andrej Babis said as draft preparations near an end.
The Czech Republic’s overall public finances have been one of the European Union’s stronger performers in recent years with an fiscal surplus since 2016 although a slowing economy and higher spending commitments have pushed it to seek savings.
Babis said on his Facebook profile on Sunday evening that state income would increase by around 100 billion crowns next year. He said a planned digital tax would raise around 5 billion crowns.
Investment spending was set to rise by 13 billion crowns to 135 billion crowns, he said. Child care benefits will also rise, costing the budget 8.6 billion crowns.
“The 2020 budget is ready, it is only missing an agreement on wages,” Babis said in his post.
The Finance Ministry was due to hold a news conference later on Monday on the 2020 budget.
Babis’s government has come under criticism by some economists for boosting spending too generously recently, strapping future budgets when the economy slows and under-investing.
The Finance Ministry has forecast the overall fiscal balance, which includes also regional government budgets and some healthcare along with the central state budget, to fall back into a slight deficit in 2020.
Babis said budget savings will come in administration as well as a lower number of state workers.
(Reporting by Jason Hovet)
