The 2025 budget has been formulated on the basis of overestimates of expenditure for 2024. The increase in the deficit could therefore be higher this year than shown when the budget documents were adopted. The deficit excluding intervention measures is thus projected to increase by as much as EUR 1.6 billion this year compared to the latest available figures for 2024, while expenditure is projected to increase by EUR 2.4 billion (17% higher than last year). More than half of the additional expenditure will be on current spending (e.g. wages and social benefits), which is a long-term burden on public finances. This approach to budgetary planning can lead to irrational spending and jeopardise the sustainability of government finances.
In January, the budget had a surplus of EUR 203 million, down from a surplus of EUR 336 million the previous year. Revenue increased by 1.9%, significantly less than last year (10.6%), mainly due to less EU funding. Expenditure increased by 18%, mainly due to higher subsidies and investments.
The health insurance budget (ZZZS) had a surplus of EUR 79 million last year, mainly due to the transformation of supplementary insurance into a compulsory contribution and the further increase of the transfer from the state budget to 0.6% of GDP, almost three times more than before the epidemic.
The record 8.8% pension adjustment forced the transfer from the state budget to the pension insurance budget (ZPIZ) to increase by almost a third last year to EUR 1.4 billion, or 2.2% of GDP. Pension expenditure has grown by 44% in five years and accounts for 10% of GDP.
Municipalities ran a deficit of -0.4% of GDP last year (EUR -236 million), the highest since the financial crisis fifteen years ago. The main reason for the increase in the deficit compared to 2023 is less money from the state budget for natural disaster recovery.