The Czech state budget deficit will deepen by an additional CZK30bn (€1.2bn) to combat the aftermath of the recent damaging flooding that swept through the Central European region.

The budget deficit for this year will deepen from the originally planned CZK252bn to at least CZK282bn this year and by an additional CZK10bn next year.

 “We would like to approve both at the cabinet [session] next week. The planned costs of CZK40bn are at the upper ceiling,” Minister of Finance Zbynek Stanjura wrote on his X (formerly Twitter) account on September 19.

Stanjura added cabinet ministers are urged to  “check on further savings at their resorts so that the process of consolidation is not slowed down,” and that “a significant impact on the stability of the Czech public finances”  is not expected.  

Additional resources should be secured through the issuing of government bonds, Czech Television reported, while Stanjura also stated that “of course, we will also apply for the European Union money from the Solidarity Fund”.

The country’s centre-right cabinet of Petr Fiala passed an austerity package last year to combat the ballooning budget deficit, but the necessary measures to combat flooding can now damage some of its goals.

The announcement coincided with the National Budget Council (NRR) releasing its report on budget responsibility in 2023.

“We have agreed that from the perspective of budget politics, we are slowly and carefully steering through a dangerous curve, which we have approached in the times of COVID-19 and shortly after,” Chairman of the NRR Mojmir Hampl was quoted as saying by the Czech Press Agency (CTK).

“Whether we really steer it is a question of future budgets,” Hampl continued, stating that “the manoeuvre is not over, not everything from the perspective of stabilisation of public finances is behind us.”

Member of the NRR board Petr Musil stated that last year NRR projected “hitting of the debt break sometime around 2028,” the year the projection moved to “the year 2038”.