The Babiš government, after five months of this year, is showing a real deficit that is approximately four billion crowns lower than that of the Fiala government last year. Since the Babiš government came into power, the interest rate on Czech debt has increased less than the average in the EU.

Babiš's government, from January to May, operated with a 2026 budget deficit of 170.2 billion crowns. In purely nominal terms, it operated with a slightly lower deficit than the previous year's government, led by Fiala, which recorded a deficit of 170.5 billion CZK. Taking into account inflation, this year's deficit corresponds to 174.4 billion CZK, meaning that, in reality, Babiš's government is currently operating with a deficit that is 4.2 billion lower than that of Fiala's government last year. Taking into account inflation, this year's deficit is the lowest since 2019.

Are international investors concerned about the level of debt incurred by Babiš's government?

The current government was appointed on December 15, 2025. Since then, the yield (interest rate) on the ten-year Czech government bond has increased by 0.06 percentage points. The median for 24 countries in the EU is 0.12, and the average is 0.08. The increase in interest rates is therefore lower than the median and the average for 24 EU countries (see Bloomberg graph: last column).

For example, Poland recorded an increase of 0.36 percentage points over the same period, while Germany recorded an increase of 0.12.

If investors, i.e., people who support their views with money, are afraid of the current Czech government's debt, they are twice as concerned about the debt of the German government and six times as concerned about the debt of the Polish government.

Lukáš Kovanda, Ph.D.