Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 28 February 2025
At the beginning of 2025, the territorial budgets operated with a budget surplus of CZK 20.2 billion. However, compared to the same period last year, the resulting balance decreased, primarily reflecting a faster growth rate of current expenditure, which exceeded a slight increase in revenue. The year-on-year increase in revenue was driven by higher non-investment transfers, especially in direct education expenditure. On the expenditure side, both current and capital expenditure increased.
According to the Ministry of Finance's macroeconomic forecast scenario, the domestic economy should accelerate in 2025 (by 1.1% compared to 2024) and achieve GDP growth of around 2%. The recovery is mainly supported by stabilizing domestic demand and a gradual fading of external economic uncertainties. According to the Czech National Bank's February macroeconomic forecast, inflation is expected to average around 2.3% in 2025. This outlook reflects the assumption of stabilizing price pressures and a gradual return of inflation to the inflation target of 2%. Local governments should thus in 2025 manage under conditions of economic recovery and stable inflation, which creates promising conditions for strengthening investment activity and supporting strategic projects.
Detailed information is provided in the Monitor system (data for territorial budgets can be obtained in the Analytical section under Local organizations).
Management of Local Governments
At the beginning of 2025, regions, municipalities and voluntary associations of municipalities managed a budget surplus of CZK 20.2 billion. Year-on-year, the economic result decreased by 23.7%, i.e. by CZK 6.3 billion, due to a higher growth rate of current expenditures of territorial budgets. If the economic result is adjusted for direct expenditure on education and subsidies1 to private schools, the budget balance reached CZK 19 billion and decreased by 27.6%, i.e. by CZK 7.3 billion year-on-year.
Total consolidated revenues of territorial budgets in February 2025 amounted to CZK 136.9 billion and increased by 2.3% year-on-year, i.e. by CZK 3.1 billion. After adjusting the revenues of regions and municipalities (in the case of the capital city of Prague) for direct expenditure on education and subsidies to private schools1, revenues amount to CZK 98.9 billion. Own revenues of territorial budgets amounted to CZK 75.9 billion and remained almost unchanged. The self-sufficiency of territorial budgets, which represents the share of own revenue in total adjusted revenue2, was 76.8% and increased slightly year-on-year. The year-on-year increase in own revenue is mainly due to capital revenue (up by 14.5% year-on-year, i.e. by CZK 0.2 billion), specifically an increase in revenue from the sale of land, which reached CZK 1.4 billion. Tax revenue increased only slightly year-on-year to CZK 62.2 billion. Transfers received by territorial budgets reached CZK 57.8 billion in February 2025 and recorded an increase, which was exclusively due to the growth of non-investment transfers. In contrast, investment transfers received fell year-on-year at the beginning of the year.
The total consolidated expenditure of territorial budgets in February 2025 amounted to CZK 116.6 billion and increased by 8.7% year-on-year, i.e. by CZK 9.4 billion. After adjusting the expenditure of regions and municipalities (in the case of the capital city of Prague) for direct expenditure on education and subsidies to private schools1, expenditure amounts to CZK 79.8 billion. Current expenditures reached CZK 102.3 billion (year-on-year growth of 6.6%, i.e. CZK 6.3 billion), with the dominant part of these current expenditures consisting of transfers which regions and municipalities transfer to Contributory organizations and similar organizations. The year-on-year increase in current expenditure was mainly due to non-investment transfers to primary schools. In February, capital expenditure increased year-on-year (by 27.2%, i.e. by CZK 3.1 billion) due to investments in primary school buildings and roads and amounted to CZK 14.4 billion.
Management of regions
In February 2025, the regions reported a positive budget balance of CZK 13.6 billion, which is a continuation of the previous year's performance (year-on-year decrease of 1.3%, i.e. CZK 0.2 billion). If the budget balance of the regions is adjusted for direct expenditure on education and subsidies for private schools1, the result of the budget then reached CZK 12.5 billion, which is a year-on-year decrease of 7.5%, i.e. CZK 1 billion.
Total revenues of the regions reached CZK 67.1 billion at the end of February 2025 and increased year-on-year by 2.8%, i.e. by CZK 1.8 billion. After adjusting regional revenues for direct education spending and subsidies to private schools1, revenues amount to CZK 34 billion. Own revenue of regions decreased slightly year-on-year to CZK 17.7 billion and accounted for 51.9% of total adjusted revenue2. The dominant part of own revenue is tax revenue (up by 2.6% year-on-year, i.e. by CZK 0.4 billion), which reached CZK 15.3 billion in February.
At the beginning of 2025, regions received transfers in the amount of CZK 49.5 billion (year-on-year growth of 4.4%, i.e. CZK 2.1 billion). Of these, non-investment transfers received by the regions reached CZK 49 billion (year-on-year growth of 9.4%, i.e. CZK 4.2 billion). Investment transfers received by the regions amounted to CZK 0.5 billion in February this year (year-on-year decrease by 81.2%, i.e. by CZK 2.1 billion).
The total expenditure of the regions in February 2025 amounted to CZK 53.6 billion and increased by 3.9% year-on-year, i.e. by CZK 2 billion. After adjusting regional spending for direct spending on education and subsidies to private schools1, spending amounts to CZK 21.5 billion. The largest share in the year-on-year growth of total expenditure was accounted for by current expenditure (by 3.7%, i.e. CZK 1.8 billion), which reached CZK 50.8 billion, mainly non-investment transfers to primary and kindergarten schools. Transfers transferred by the regions to contributory and similar organizations amounted to CZK 38.9 billion and accounted for 76.5% of total current expenditure. Capital expenditure increased year-on-year (by 8.4%, i.e. CZK 0.2 billion) to CZK 2.8 billion, mainly due to an increase in investments in museum and gallery buildings.
The balances on bank accounts and the debt of regions are only available for December 20243 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 31 December 2024.
Management of Municipalities
In February 2025, municipalities managed a budget surplus of CZK 6.5 billion, which is half of the budget balance of the previous year (see Chart No. 3). Prague's budget in February ended in a surplus of CZK 4.7 billion with total revenues of CZK 21.4 billion and expenditures of CZK 16.7 billion. Excluding the capital city of Prague, the total consolidated revenues of the municipalities amounted to CZK 49 billion, expenditures CZK 47.2 billion and the budget result ended in a surplus of CZK 1.8 billion. After adjusting the result of the municipalities (Prague) for direct expenditure on education and subsidies to private schools1, the balance is CZK 6.3 billion.
Total municipal revenues reached CZK 70.4 billion at the beginning of this year and increased year-on-year 1.7%, i.e. CZK 1.2 billion. After adjusting municipal revenues (Prague) for direct expenditure on education and subsidies to private schools1, revenues amount to CZK 65.4 billion. Own revenue of municipalities, which accounted for 88.8% of total adjusted revenue2 in February, recorded a slight year-on-year increase and reached CZK 58.1 billion. The largest volume of own revenue is tax revenue, which decreased by 0.6% year-on-year, i.e. by CZK 0.3 billion, to CZK 47 billion.
By the end of February, municipalities received transfers amounted to CZK 12.3 billion (year-on-year growth of 8.9%, i.e. CZK 1 billion). Of these, non-investment transfers amounted to CZK 10.2 billion and increased year-on-year (by 4.6%, i.e. by CZK 0.4 billion). Investment transfers received by municipalities increased year-on-year (by 37.2%, i.e. by CZK 0.6 billion) to CZK 2 billion.
Total municipal expenditure in February 2025 amounted to CZK 63.9 billion and increased by 12.3% year-on-year, i.e. CZK 7 billion. After adjusting municipal spending (Prague) for direct education spending and subsidies to private schools1, spending amounts to CZK 59.1 billion. The year-on-year growth was mainly due to an increase in current expenditure (by 8.4%, i.e. CZK 4 billion) to CZK 52.2 billion, mainly due to an increase in non-investment transfers to primary and nursery schools. The majority of current expenditure was accounted for by non-investment transfers to contributory and similar organizations, which amounted to CZK 14.3 billion. Capital expenditure also increased compared to the previous year (by 34.1%, i.e. CZK 3 billion) to CZK 11.7 billion, mainly due to an increase in investment in museum and gallery buildings.
The balances on bank accounts and the debt of regions are only available for December 20243 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 31 December 2024.
Voluntary associations of municipalities
In February 2025, the voluntary associations of municipalities had total revenues of CZK 1 billion and total expenditures of CZK 0.8 billion. The budget balance decreased year-on-year and ended in a surplus of CZK 0.2 billion.
1 The direct costs of education and subsidies for private schools represent funds from the state budget, which are distributed and directly allocated to the schools and school facilities by regions and Prague. It is therefore a non-investment flow transfer and the region and Prague cannot dispose of these funds in any way. For this reason, the total revenues and expenses of the regions and Prague are reduced so not to distort their results of management.
2 Total revenue net of revenue from transfers for direct expenditure on education and from subsidies to private schools.
3 The balance on bank accounts and debt are available from the financial statements, which are submitted to the Central State Accounting Information System on a quarterly basis.