The Czech budget deficit has reached its highest point in the history of the Czech Republic over July. It now stands at a horrifying 279.4 billion crowns. The current government managed to get the country into such deficit despite the fact that the state income, which comes mainly from taxes and insurance, has risen by 2.4 percent. Furthermore the government got a big financial boost this year from auctioning electromagnetic wave frequency rights to mobile operators, who are getting ready to implement 5G networks. On the other hand, the government was expected to spend more than usual on support programmes for small businesses to revive the economy after the pandemic. However, they spent more than expected and still managed to revive the economy less than expected. Many are blaming the current government for being too populist in the past years. If the government spent less on programmes which were allegedly designed only to buy votes, such as the massive discounts on public transport, maybe it would have had more money to deal with the global crisis that ensued in 2020. On one hand, we can not blame them for not expecting a pandemic, but on the other, the fact that a plentiful period is bound to be followed by a period of economic decline is a part of Economics 101. It will be interesting to see if this failure will cost the current coalition the elections. If it will, many future governments will have to tackle the massive debt the current government of Andrej Babiš will leave behind.
