Czech government presents plans to cut 2024 budget deficit

The Czech government agreed a package of spending cuts and tax hikes to reduce the budget deficit next year, Prime Minister Petr Fiala said on Thursday. Fiala said the budget deficit would be 94 billion crowns ($4.43 billion) higher in 2024 without the consolidation package, which was presented on Thursday alongside planned pension reforms.

The Czech government agreed a package of spending cuts and tax hikes to reduce the budget deficit next year, Prime Minister Petr Fiala said on Thursday.

Fiala said the budget deficit would be 94 billion crowns ($4.43 billion) higher in 2024 without the consolidation package, which was presented on Thursday alongside planned pension reforms. "If we weren't able to step on the brake, the situation would get out of hand in several years and our children would suffer the consequences," Fiala said alongside ministers from his five-party government coalition.

The government was due to release more details on the package on Thursday. The government has an approved deficit target of 295 billion crowns in 2023.

Last year the deficit shrank to 3.6% of gross domestic product from more than 5% in the previous two years. The Finance Ministry has forecast the deficit to fall below 3% of GDP in 2024, bringing it back in line with European Union rules for the first time since 2019. ($1 = 21.2420 Czech crowns)