Long a bastion of macroeconomic stability and budget surpluses, the Czech Republic’s state budget has taken a sudden dive into deficit territory. The first six months ended CZK 28.8bn in the red, but what really had the headlines screaming this morning was the CZK 6bn hole dug in just the month of June. Illustrating just how bad things have become, and how quickly, is the fact that as of June 2017, the country’s national budget was carrying a CZK 4.6bn surplus. What remains to be seen is whether the government can stick to its plan to run up a budget of CZK 50bn in 2018, or whether this will prove impossible. The chief economist of BH Securities Štěpán Křeček told the news program on TV Nova that state employees were paid 14 percent more over the first half of the year than they were in 2017. “Expenses for state workers are starting to get out of control and the number of administrative works should be reduced,” he said.
