Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 31 October 2025
In October, regional budgets reported a significantly lower year-on-year surplus of CZK 23.6 billion. The decline in the budget surplus was mainly influenced by faster growth in expenditure, particularly current expenditure, and at the same time by a weakening of the revenue side, where there was a decline in non-tax revenues related to the absence of extraordinary one-off collections from the previous year (payment to creditors of Sberbank CZ). Despite the year-on-year decline in the surplus, local government budgets remained in surplus and financially stable, with the finances of the City of Prague playing a key role in this result. Without taking this into account, municipalities would have reported a deficit. The structure of expenditure continues to indicate a targeted strengthening of the long-term development potential of the territory (growth in investment expenditure), so the lower balance can be interpreted more as a result of the active use of available resources (utilization of investment potential) than as a sign of fiscal imbalance.
Total revenues of local budgets continued to grow year-on-year, with transfers, especially non-investment transfers, being the main source of this growth. Own revenues developed less dynamically, mainly due to lower non-tax revenues related to the extraordinary payment to Sberbank CZ creditors in the previous year. Tax revenues strengthened mainly thanks to corporate income tax revenues, which were boosted in particular by the maturity of quarterly tax advances. At the same time, personal income tax revenues also strengthened year-on-year, following the continued growth in wages and salaries in the economy, partly reflecting the impact of tax changes effective from 2024, in particular the abolition or reduction of selected tax credits. VAT revenues grew more slowly, in line with the development of nominal household expenditure.
On the expenditure side, there was a significant increase in current expenditure as a result of higher non-investment transfers to primary schools. Local governments continued their intensive investment activity at the end of the year, particularly in the areas of education, sports infrastructure, and culture. It is precisely this increased investment activity by local governments, focused on the development of infrastructure and public services, that can be seen as a positive factor for long-term development.
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
In October 2025, regions, municipalities, and voluntary associations of municipalities had a budget surplus of CZK 23.6 billion, which fell by more than half year-on-year (see Chart No. 1). The decline in the balance was mainly due to dynamic growth in investment expenditure and, on the revenue side, a significant weakening of non-tax revenues related to an extraordinary payment to creditors of Sberbank CZ in the previous year. After adjusting for direct expenditure on education and subsidies to private schools1, the adjusted budget balance was CZK 22.9 billion, representing a year-on-year decline of 55.5%, or CZK 28.5 billion.
Revenues of territorial budgets
Total consolidated revenues of local budgets in October 2025 amounted to CZK 730.5 billion, representing a year-on-year increase of 5.2%, or CZK 36.4 billion. After adjusting the revenues of regions and municipalities (in the case of the capital city of Prague) for direct expenditures on education and subsidies for private schools1, the adjusted revenues amounted to CZK 548.3 billion. The own revenuesi of local budgets, which amounted to CZK 454.9 billion, strengthened again year-on-year. The self-sufficiency of regional budgets, which represents the share of own revenues in total adjusted revenues2, was 83% in October this year and slightly decreased year-on-year.
The year-on-year increase in total revenues was mainly due to transfers, which rose by 9.3%, or CZK 23.3 billion, to CZK 275.4 billion. This was mainly due to a 9.6% increase in non-investment transfers (in particular, an increase in direct expenditure on education) of CZK 21.7 billion, which amounted to CZK 247.5 billion. On the other hand, investment transfers, which account for only a fraction of total transfers, increased slightly year-on-year.
Tax revenues increased by 5.3% year-on-year, i.e. by CZK 19.5 billion, to CZK 387.7 billion. The year-on-year decline in non-tax revenues by 11.2%, i.e. by CZK 7.5 billion, to CZK 59.5 billion is related to the payment to creditors of Sberbank CZ, made in the previous year, and a decline in interest income.
Expenditure of territorial budgets
Total consolidated expenditure of regional budgets in October 2025 amounted to CZK 706.9 billion, representing a year-on-year increase of 10.1%, or CZK 64.6 billion. After adjusting expenditures for direct expenditures on education and subsidies for private schools1, adjusted expenditures amounted to CZK 525.5 billion.
Current expenditure rose by 7.8%, or CZK 40.5 billion, to CZK 557.6 billion. This was due to an increase in non-investment transfers to primary schools. Capital expenditure increased by 19.3% year-on-year, i.e. by CZK 24.1 billion, to CZK 149.3 billion, mainly due to investments in primary schools and sports facilities.
Management of regions
The budget balance of the regions reached CZK 4.1 billion in October 2025, which was more than half lower than in the same period of the previous year. After adjusting the balance for direct expenditure on education and subsidies for private schools1, the economic result ended up with a surplus of CZK 3.4 billion.
Regional revenues
Total regional revenues reached CZK 307.1 billion at the end of October 2025, representing year-on-year growth of 4.5%, or CZK 13.3 billion. After adjusting for direct expenditures on education and subsidies for private schools1, adjusted revenues amounted to CZK 147.4 billion. The regions' own revenuesi remained almost unchanged year-on-year, reaching CZK 103.1 billion and accounting for 70% of total adjusted revenues2.
Tax revenues, which constitute the most significant part of own revenues, increased by 5.9% year-on-year, i.e. by CZK 5.1 billion, to CZK 93.2 billion. The most significant increase was recorded in corporate income tax revenues, which rose to CZK 25.6 billion, positively influenced by the maturity of quarterly tax advances. Income from personal income tax also increased year-on-year to CZK 21.5 billion, reflecting increased wage and salary growth in the economy and, to a lesser extent, the impact of tax changes effective from 2024 (abolition or restriction of selected tax allowances). Revenue from VAT grew to CZK 45.5 billion. The largest percentage growth was recorded in other tax revenues, which account for only a small part of total tax revenues.
In October 2025, regions received transfers in the amount of CZK 204 billion (year-on-year growth of 6.8%, i.e. CZK 12.9 billion). Of these, non-investment transfers received by the regions reached CZK 196.7 billion (year-on-year growth of 8.6%, i.e. CZK 15.5 billion). Investment transfers received by the regions amounted to CZK 7.3 billion, fell by almost a third year-on-year.
Regional expenditure
Total regional expenditure in October 2025 amounted to CZK 303 billion, increased by 7.4% year-on-year, i.e. by CZK 20.7 billion. After adjusting regional expenditure for direct expenditure on education and subsidies for private schools1, adjusted expenditure amounted to CZK 143.9 billion. The year-on-year growth was especially attributable to current expenditure (increase 7.2%, or CZK 18.1 billion), which amounted to CZK 269.2 billion. Transfers to contributory and similar organizations amounted to CZK 203.3 billion and accounted almost for 76% of total current expenditures, mainly non-investment transfers provided to primary and nursery schools as part of direct expenditures on education. Capital expenditure increased by 8.6% year-on-year, i.e. by CZK 2.7 billion, to CZK 33.7 billion, mainly due to increased investment in museums, and galleries.
The balances on bank accounts and the debt of regions are only available for September 20253 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 30 September 2025.
Management of Municipalities
In October 2025, municipalities had a surplus of CZK 18.8 billion, which was more than half less than in the previous year (see Chart No. 3). Of this, the budget of the capital city of Prague ended with a surplus of CZK 19.4 billion (a year-on-year slight growth) with total revenues of CZK 120.2 billion and expenditures of CZK 100.4 billion. Excluding the City of Prague, the total consolidated revenues of municipalities amounted to CZK 311.6 billion, expenditures to CZK 312.6 billion, and the budgetary result even ended in a deficit of CZK 0.9 billion.
Total municipal revenues in October reached CZK 431.8 billion, representing a year-on-year increase of 5.7%, or CZK 23.2 billion. After adjusting municipal revenues (for the capital city of Prague) for direct expenditures on education and subsidies for private schools1, adjusted revenues amounted to CZK 409.4 billion. Municipalities' own revenuesi, which accounted for 85.6% of total adjusted revenues2 in October, recorded year-on-year growth and reached CZK 305.6 billion.
This was mainly due to tax revenues, which rose by 5.1% year-on-year, i.e. by CZK 14.4 billion, to CZK 294.6 billion. The most significant year-on-year increase was in corporate income tax revenues, which rose to CZK 76.6 billion, positively influenced by the maturity of quarterly tax advances. Income from personal income tax also increased year-on-year to CZK 60.1 billion, reflecting higher wage and salary growth in the economy and, to a lesser extent, the impact of tax changes effective from 2024 (the abolition or restriction of selected tax allowances). Revenue from VAT grew to CZK 121.7 billion. Other tax revenues amounted to CZK 36.2 billion (of which CZK 17 billion was from real estate tax) and recorded only slight growth.
By the end of October, municipalities received transfers amounted to CZK 81.3 billion (year-on-year growth of 14.9%, i.e. CZK 10.5 billion). Of these, non-investment transfers amounted to CZK 59.6 billion and increased year-on-year more than 11.8%. Investment transfers received by municipalities recorded year-on-year growth, reaching CZK 21.7 billion.
Total municipal expenditure in October 2025 amounted to CZK 413 billion, representing a year-on-year increase of 11.8%, or CZK 43.5 billion. After adjusting municipal expenditure (for the capital city of Prague) for direct expenditure on education and subsidies for private schools1, adjusted expenditure amounted to CZK 390.6 billion. The year-on-year growth was mainly due to an increase in current expenditures (by 8.2%, i.e., CZK 22.5 billion) to CZK 296.9 billion, in particular due to an increase in non-investment transfers to primary and nursery schools. Non-investment transfers to contributory and similar organizations, which amounted to CZK 76.5 billion, accounted for the largest share of current expenditures. Capital expenditure increased significantly compared to the previous year (by 22%, i.e. CZK 20.9 billion) to CZK 116.1 billion, mainly due to increased investment in sports facilities and roads.
The balances on bank accounts and the debt of regions are only available for September 20253 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 30 September 2025.
Voluntary associations of municipalities
In October 2025, voluntary associations of municipalities managed total revenues of CZK 6.6 billion and total expenditures of 6.1 billion. The budget balance declined year-on-year and ended with a surplus of CZK 0.5 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.
i Own revenue = tax + non-tax + capital revenue