Prime Minister Andrej Babiš’ cabinet approved the 2020 draft budget on Monday, just hours after trade union leaders and employers expressed support for it. The compromise proposal which respects a 40 billion crown deficit ceiling should see more money spent on pensions, social services, teachers’ wages, parental benefits as well as research, sport and investments.
The draft state budget for 2020 that the Ministry of Finance forwarded to
the government at the end of last week anticipated both revenues and
expenditures some CZK 20 billion higher than figures approved at the end of
June. However, the planned deficit of CZK 40 billion is not affected by
this, the minister of finance, Alena Schillerová, told Czech Television.
The minister said the increased revenues and expenditures were due to a change in the macro-economic indicators.
A new ranking of the best and worst places to live in the Czech Republic has just been published. The country’s major cities and surrounding municipalities generally performed well, while towns in the poorer regions of the northwest and northeast tend to lie at the bottom of the table. The index primarily aims to provide people with a list of locations that have a high quality of life, while also giving municipalities the means through which to better target their public spending.
The parties of the coalition government are at odds over the draft budget for 2020. The Social Democrats, the junior partner in the ruling coalition, have demanded an additional 20 billion crowns for their ministries. Prime Minister Andrej Babiš on Wednesday ridiculed the demand, saying the Social Democrats have spending in their genes.
The Czech National Bank has lowered its forecast for the development of
public finances in 2019 and 2020, in its Inflation Reports summary
published on Friday. The bank now expects a surplus of 0.3 percent of GDP
in 2019, as opposed to February’s more optimistic estimate of 1.2
percent. The new expectations for 2020 have gone down even more sharply
from February’s 1.3 percent to the current forecast of 0.2 percent. This
year, public debt is expected to sink from 32.7 percent of GDP to 30.9
percent. Next year, a further decrease to 29.3 percent forecast.
In a prognosis released on Thursday, the bank also lowered the country’s economic growth projection to 2.5 percent in 2019 and 2.8 percent in 2020. A further decrease in the Czech crown’s exchange rate is also expected.
Prague is the second most sustainable city in Central and Eastern Europe after Vienna, suggests the Sustainable Cities Index, put together by international consultancy company Arcadis. In comparison with major cities around the world, it has placed 23rd. The index, which is put together every two years, describes the Czech capital as a “balanced innovator.” I asked Jan Jurčíček, head of marketing at Arcadis, to explain what that means in more detail:
The lower house of Parliament on Wednesday approved the 2019 draft budget in its first reading. The basic parameters of the budget, such as the deficit goal, are thus definitively set with only minor shifts in funds possible. Government spending next year should prioritize the social sphere, investments, an increase in public sector salaries and pensions.