Czechia have never seen higher debt, and it is still rising
Last year, the national budget deficit reached 3.6% of GDP, better than expected. However, by 2023, it is expected to increase to 4,2%, mainly due to subsidies for high energy prices. More precisely, the national debt increased to 44,6% of GDP in 2022, compared to 42% in 2021, making it the highest level of debt ever recorded. For this year, the Ministry of Finance expects the debt to increase to 45.8% of GDP.
Public accounts management this year was better than the previous year, this is because it was not possible to use all the support for companies due to high energy costs and lower social benefit withdrawals and the lower impact of the Sberbank collapse on the budget.
According to Stanjura, it will only be possible to estimate the impact of these measures in more detail in April, after a quarterly assessment of the compensation for electricity and gas price caps and the levy from electricity producers for sales prices. He also reiterated that the government is preparing a consolidation package that is expected to reduce the structural deficit by at least one percentage point of GDP, or around SEK 70 billion. “Next year, budget deficit should therefore fall below three per cent of GDP with this manoeuvre.” The team of experts from the individual government parties, together with experts from the government’s National Economic Council, are now discussing the individual measures to implement it. The team is divided into groups: taxes, social affairs, health, public administration and other areas. They should reach an agreement by mid-February, which will then be discussed in government.
Sources: https://www.camic.cz/ ; https://www.irozhlas.cz/
Sources of images: https://pixabay.com/ ; https://storyset.com/
