Czechia’s proposed state budget for 2027 passed its first reading in parliament on Oct. 22. While itemizing the state’s allocation of resources for the coming year, the solution it proposes to the country’s economic challenges is simple: spend, spend, spend.
Next year’s budget plans for a deficit of a deficit of CZK 386 billion, a whopping increase of CZK 76 billion from this year. It’s the highest deficit ever recorded in Czechia except for the crisis year of 2021, when the Covid pandemic forced huge emergency state spending.
Opposition politicians and economists alike are asking the same question: why? The government argues that the massive spending in next year’s budget will boost economic growth. Detractors say it will burden the country with unsustainable debt at a time when demographic change and global uncertainty are already putting significant strain on public resources.
Where’s all the spending going?
Czech Prime Minister Andrej Babiš previously pledged that the budget deficit for next year would be significantly below CZK 400 billion. It hasn’t turned out that way; speaking in parliament, Finance Minister Alena Schillerová herself admitted that she does not like how high the proposed deficit has ultimately climbed.
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Summary for: Borrow and spend: Czechia’s 2027 budget explained
Where’s all the spending going?
