Prime Minister Petr Fiala (ODS) considers it highly likely that the state budget deficit will be kept below CZK 300 billion this year. Fiala made this statement in a video on social media. He stated that the Czech Republic will probably meet the important Maastricht criterion for eurozone entry next year, which requires reducing the public budget deficit to below three percent of GDP. The Prime Minister also anticipates that next year, inflation will approach 2%.
Fiala welcomed the decline in inflation below ten percent, referring to it as a psychological threshold. He sees no indication that inflation will return to double-digit figures. On the contrary, he believes that next year, inflation could even approach two percent, which aligns with the long-term goal of the Czech National Bank.
The Prime Minister rejected the notion that his government had no role in the decline of inflation. He mentioned several measures taken by his cabinet that contributed to reducing inflation, including reducing the budget deficit and lowering energy, food, and fuel prices.
“It is essential that we do not live on debt and that we reduce deficits,” he emphasized. He mentioned the adoption of a so-called revitalization package, which the government expects will decrease the budget deficit by CZK 94 billion next year. For the current year, the government prepared a budget with a deficit of CZK 295 billion. Fiala believes it is highly likely that the deficit will be kept below 300 billion this year. Minister of Finance Zbyněk Stanjura (ODS) had also expressed a similar view earlier. However, some experts had predicted in recent months that due to the rapidly growing deficit, the year-end deficit might be higher.
Fiala is optimistic about the Czech Republic meeting the key Maastricht criterion for euro adoption next year, which is having public budget deficits below 3%.
