PRAGUE, Oct 6 (Reuters) – The Czech Republic is likely to start 2026 on a provisional budget, according to a senior official from the opposition ANO party that won a parliamentary election at the weekend. The outgoing centre-right government submitted a 2026 central state budget plan targeting a deficit of 286 billion crowns ($13.81 billion), up from 241 billion seen in the 2025 budget. Prime Minister Petr Fiala's government has cut the overall fiscal gap below the European Union limit of 3% of gross domestic product and expects a 1.9% deficit this year. But the ruling parties lost the election to the populist party of former Prime Minister Andrej Babis, who has promised lavish spending to lift wages, cut taxes and kick-start economic growth. That would upend the central European country's frugal mindset that made it a fiscal standout recently. "Everything will depend on the formation of a new government, which is now the number one priority," ANO official Alena Schillerova, who was finance minister in a previous Babis-led government, was quoted as telling CTK news agency on Sunday. "Avoiding an interim budget regime, even given the low quality of the budget of the outgoing minister, is very unlikely." ANO, which won 80 of the 200 seats in the lower house, is seeking partners to secure a majority and talks are expected to last weeks or months, leaving little time to resubmit and approve a new 2026 budget plan. A provisional budget will limit discretionary spending at the previous year's level until lawmakers approve a new budget. ($1 = 20.7090 Czech crowns) (Reporting by Jason Hovet; editing by Mark Heinrich)
(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
