Overview of the latest economic events in the Czech Republic
The Czech economy enters the second half of 2025 with a growing budget deficit, significant infrastructure investment and continued acquisitions in the energy sector. The Ministry of Finance announced that it issued CZK 181.3 billion in nominal value of medium- and long-term bonds in the first half of the year, up from CZK 146.3 billion last year.
Finance Minister Zbyněk Stanjura (ODS) said that the budget deficit next year is likely to reach CZK 280 billion, an increase from this year's plan of CZK 241 billion. The main reasons are increased defence spending and investment in the construction of new nuclear units in Dukovany power plant.
In the field of railway infrastructure Railway administration announced that in the first half of the year, it had deployed ETCS on 1,200 kilometres of track and that 1,981 vehicles had been equipped with on-board units. The Ministry of Transport contributed CZK 10.5 billion to the carriers for these units.
Foreign investment
Group Veolia Energie ČR continues its expansion in the Czech market. It recently signed an agreement to acquire a majority stake in Energo Příbram from the investment group Natland. Energo Příbram is the main supplier of heat and hot water for the residents of Příbram. The transaction is subject to the approval of the Office for the Protection of Competition.
Veolia also bought 15%'s stake in the company Veolia Energie ČR from the group CEZ, increasing its share to more than 98 %. The acquisition is part of the company's strategic GreenUp programme, which aims to accelerate the environmental transformation of the company's energy activities.
In the field of energy savings Veolia through its subsidiary Advance Energo signed contracts for the implementation of EPC projects with Rudolf and Stefanie Hospital Benešov a Regional Hospital Příbram. These projects, worth nearly CZK 270 million, aim to reduce the energy consumption of hospital buildings and facilities. Veolia guarantees that over the next 10 years they will bring energy savings to hospitals worth almost CZK 100 million.
Significant events outside the Czech Republic with global impact
The European Commission has presented a plan to strengthen Europe's defence capabilities and provide immediate assistance to Ukraine, which should make available up to €800 billion (20 trillion CZK). In response to this, Finance Minister Zbyněk Stanjura submitted a proposal that would allow the government to increase defence spending beyond the current two per cent of GDP, even above the approved budget spending framework.
The move is in line with the government's decision to gradually increase defence spending by 0.2 percent of GDP per year until 2030. The aim is to achieve defence spending of three per cent of GDP, which would mean an increase of approximately CZK 300 billion.
These events suggest that the Czech Republic is preparing for increased spending in the defence and energy sectors, which will have an impact on the state budget and the overall economic stability of the country.
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