01. 07. 2026 Government deficit and debt - 1. quarter of 2026

In the Q1 2026, the general government sector deficit reached CZK 72.3 billion, which means that it worsened by CZK 1.6 billion in the year-on-year comparison. The central government ended up with a deficit of CZK 82.7 billion that improved by CZK 17.0 billion, y-o-y. Performance of the local government sector ended up with a surplus in the amount of CZK 12.0 billion, which means, in a year-on-year comparison, worsening by CZK 19.9 billion. Performance of social security funds (of health insurance companies) ended up with a deficit of CZK 1.6 billion, by CZK 1.2 billion lower, year-on-year.

“In the first quarter of 2026, the general government sector ended up with a deficit of CZK 72.3 billion, which is in relative terms 3.5% of the GDP. The government debt ratio increased to 44.1% of the GDP, year-on-year,” Helena Houžvičková, Director of the Macroeconomic Statistics Section of the Czech Statistical Office (CZSO), stated.

Tab. 1.1 The general government sector balance
( Data in the table are not seasonally adjusted; they cannot be compared quarter-on-quarter.)

The total government revenues increased by 5.1%, y-o-y, and reached 40.2% of the GDP. Especially the following contributed to the y-o-y increase in revenues: received social contributions and received taxes on production and imports. The total government expenditure increased by 4.9%, y-o-y, and reached 43.7% of the GDP. The highest growth in terms of volume was mainly recorded in social benefits payable, gross fixed capital formation, and in compensation of employees paid.

The nominal debt of the general government increased, year-on-year, by CZK 292.6 bn to CZK 3 827.9 bn. The government debt ratio increased from 43.3% to 44.1% of the GDP, y-o-y; the influence of the nominal change of the debt was +3.3 p. p., while the increasing nominal GDP reduced the debt ratio by –2.5 p. p. In the quarter-on-quarter comparison, the debt increased by CZK 41.6 bn, the nominal change of the debt was 0.4 p. p., whereas an increase in the nominal GDP contributed to a decrease in the indebtedness by –0.5 p. p., which resulted in a decrease in the debt ratio by 0.1 p. p., quarter-on-quarter.

Regarding the debt structure, a year-on-year increase was mainly recorded in issued debt securities (CZK +307.8 bn).

Chart 1.1 Debt of the general government sector

Chart 1.2 Year-on-year relative changes in government debt

The general government sector balance after seasonal adjustment as well as adjustment for calendar effects ended up with a deficit of CZK 50.7 bn, which corresponded to 2.3% of the GDP. The general government sector balance worsened by CZK 3.0 bn, q-o-q. The development of the general government sector balance adjusted by seasonal and calendar effects is shown in the chart below.

Chart 1.3 Seasonally adjusted general government sector balance