Czech Parliament Approves Increased 2024 Budget Deficit Following Floods, Reports Reuters

Czech Parliament Approves Higher Budget Deficit for Flood Aid

PRAGUE – The Czech Republic’s lower house has voted to increase the budget deficit target for 2024 to 282 billion crowns (approximately $12.34 billion). This adjustment is aimed at allocating 30 billion crowns for flood relief following severe rainfall that hit several towns near the Polish border last month.

The budget amendment was unanimously approved by lawmakers in a vote held late Tuesday. The government previously endorsed raising the deficit ceiling from the initial target of 252 billion crowns. Additionally, it plans to set aside 10 billion crowns for flood recovery efforts in the 2025 budget, which will have a deficit limit of 241 billion crowns.

The center-right administration is focusing on reducing the overall fiscal deficit, which encompasses local governments and various institutions, below the European Union’s threshold of 3% of gross domestic product this year. Achieving this goal would mark the first time the Czech Republic meets this criterion since 2019, when it recorded a budget surplus. This surplus occurred prior to the COVID-19 pandemic and the subsequent rise in energy costs following the Russian invasion of Ukraine, which necessitated increased spending to support those facing high energy bills.

Recently, the region experienced its most severe flooding in over twenty years, caused by the heavy rains.