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Czech Finance Ministry proposes higher budget deficit in 2026 and increased defence spending

The Czech Foreign Ministry proposes raising the central state budget deficit for 2026 to 286 billion crowns (13,65 billion dollars) by increasing spending on nuclear power and defence.

In a late-night release on Sunday, the ministry announced that it had sent the draft budget to the government. The government will debate the proposal before presenting it to the lawmakers in September.

The deficit is nearly 19% higher than the gap planned for 2025 of 241 billion crowns. This includes an increase in defence spending from 2% to 2.35%, which was originally scheduled for this fiscal year.

Around 18 billion crowns are also going to be spent on preparing the construction of the two new nuclear power stations that South Korea's KHNP will build in the next few years.

It also said that the ministry plans to invest at record levels. The proposal calls for an increase in overall spending of 2.3%.

The Czech centre-right has reduced the country's fiscal deficit to 1.9% of the GDP for 2025, but faces a high risk of losing the power in the upcoming parliamentary elections on October to the largest opposition party led the former prime minister Andrej Babis.

The budget must be submitted to the lower house by the end September. $1 = 20,9570 Czech crowns (Reporting and editing by Jason Hovet)

(source: Reuters)