Czech budget deficit to surpass CZK 300 billion in 2022 amid Ukraine war -minister

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PRAGUE – The Czech state budget will surpass 300 billion crowns ($13.05 billion) this year, overshooting a 280-billion-crown target, Finance Minister Zbynek Stanjura said, as spending is pushed up by the impact of war in Ukraine.

Russia’s invasion of Ukraine was expected to hit the budget this year as the Czech Republic took in hundreds of thousands of refugees fleeing the fighting, and also seeks to ease the burden of soaring inflation for households and companies.

In addition, the state is spending more on defence and increases to pensions. It has spent billions to add natural gas to state emergency reserves.

“When we see the development of tax revenue, I expect the deficit will unfortunately be over 300 billion,” Stanjura told Czech Television on Saturday evening.

Stanjura is due to present an updated budget to the government in July. The government has sought to cut the budget deficit from a record 420 billion crowns in 2021.

The five-party ruling coalition won a general election last October and pledged to rein in public finances after a jump in debt in recent years due to the coronavirus pandemic and faster pension and wage hikes promised by the previous administration.

($1 = 22.9910 Czech crowns)

(Reporting by Jason Hovet; Editing by Mark Heinrich)