Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 30 November 2025
Local government budgets ended November with a surplus of CZK 29.4 billion, which represents a significant year-on-year decline. After adjusting the balance for subsidies for direct education expenditure and subsidies for private schools, which the regions and the City of Prague had not forwarded to schools and educational institutions by the end of the month, the actual balance reached CZK 15.9 billion. Despite the decline in the balance, the regional budgets as a whole remain in surplus and show sufficient financial stability. Prague's finances have a significant share in this result. Without it, municipalities as a whole would have been in deficit.
The revenue side of the budgets maintained its year-on-year growth dynamic, but this was driven mainly by transfers, especially non-investment transfers. Own revenues grew more slowly, with their development dampened by a decline in non-tax revenues, which no longer reflect the extraordinary effect from the previous year associated with the payment of Sberbank CZ creditors. Tax revenues, on the other hand, recorded solid growth. Corporate income tax collection was supported by an increase in the tax rate, while personal income tax benefited from continued wage and salary growth in the economy and from the impact of tax system changes effective from 2024, including the reduction of certain tax credits. VAT revenue grew rather slowly, in line with the development of nominal household consumption.
On the expenditure side, the main factor was growth in current expenditure, linked to higher non-investment transfers to primary education. As the end of the year approached, investment activity by local and regional governments also intensified, concentrated mainly in the areas of education and sports infrastructure. Capital expenditure not adjusted for inflation is at a historic high and was higher in November 2026 than in the whole of 2025. The structure of expenditure also confirms the continuing focus on investment and infrastructure development, so the lower surplus can be seen more as a result of active resource utilization than as a sign of fiscal imbalance.
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 November 2025, regions, municipalities, and voluntary associations of municipalities had a budget surplus of CZK 29.4 billion, which fell by more than half year-on-year (see Chart No. 1). The decline in the balance was mainly due to the dynamic growth rate of 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 15.9 billion, representing a year-on-year decline of 68.7%, or CZK 34.8 billion.
Revenues of territorial budgets
Total consolidated revenues of local budgets in November 2025 amounted to CZK 798 billion, representing a year-on-year increase of 3.2%, or CZK 25.1 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 596.7 billion. The own revenuesi of local budgets, which amounted to CZK 493.7 billion, strengthened again year-on-year. The self-sufficiency of regional budgets, which represents the share of own revenues in total adjusted revenues2, was almost 83% in November this year and slightly decreased year-on-year.
The year-on-year increase in total revenues is mainly due to tax revenues, which rose by 5% year-on-year, or CZK 20 billion, to CZK 420.5 billion. Non-tax revenues recorded a year-on-year decline of 10.3%, or CZK 7.5 billion, to CZK 64.7 billion, which is related to the payment to creditors of Sberbank CZ made in the previous year.
Regional budgets received transfers amounting to CZK 304.1 billion (a year-on-year increase of 4.2%, or CZK 12.3 billion), with non-investment transfers, which make up the largest part, increasing by 3.8%, or CZK 10 billion, to reach CZK 271.5 billion. Investment transfers amounted to CZK 32.6 billion and recorded year-on-year growth.
Expenditure of territorial budgets
Total consolidated expenditure of regional budgets in November 2025 amounted to CZK 768.6 billion, representing a year-on-year increase of 9.6%, or CZK 67.4 billion. After adjusting expenditures for direct expenditures on education and subsidies for private schools¹, adjusted expenditures amounted to CZK 580.9 billion.
Current expenditure rose by 7%, or CZK 39.2 billion, to CZK 597.6 billion. This was due to an increase in non-investment transfers to primary schools. Capital expenditure increased by 19.7% year-on-year, i.e. by CZK 28.2 billion, to CZK 171.1 billion, mainly due to investments in primary schools and sports facilities.
Management of regions
The budget balance of the regions reached CZK 12.6 billion in November 2025. The operating result fell by more than half year-on-year (see Chart No. 2). After adjusting the balance for direct expenditure on education and subsidies for private schools¹, the economic result ended up with a surplus of CZK 0.8 billion and fell by 69.6% year-on-year, i.e. by CZK 7.8 billion.
Regional revenues
Total regional revenues reached CZK 336 billion at the end of November 2025, representing year-on-year growth of 1%, or CZK 3.3 billion. After adjusting for direct expenditures on education and subsidies for private schools1, adjusted revenues amounted to CZK 160 billion. The regions' own revenuesi remained almost unchanged year-on-year, reaching CZK 112.4 billion and accounting for 70% of total adjusted revenues2. In terms of own revenues, there was a year-on-year decline in capital revenues (minority share) and, in particular, in non-tax revenues due to payments made to Sberbank CZ creditors in the previous year.
Tax revenues, which constitute the most significant part of own revenues, increased by 5.4% year-on-year, i.e. by CZK 5.2 billion, to CZK 101.5 billion. The most significant increase was recorded in corporate income tax revenues, which rose to CZK 25.7 billion, where the effects of changes effective from 2024 were felt, in particular the increase in the tax rate, which already affected the amount of advance payments in the third quarter of this year. Income from personal income tax also increased year-on-year to CZK 23.6 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 51.5 billion. The largest percentage growth was recorded in other tax revenues, which account for only a small part of total tax revenues.
In November 2025, regions received transfers in the amount of CZK 223.7 billion (year-on-year growth of 1.4%, i.e. CZK 3.1 billion). Of these, non-investment transfers received by the regions reached CZK 214.9 billion (year-on-year growth of 2.6%, i.e. CZK 5.4 billion). Investment transfers received by the regions amounted to CZK 8.8 billion, fell by almost a third year-on-year.
Regional expenditure
Total regional expenditure in November 2025 amounted to CZK 323.5 billion, increased by 6.7% year-on-year, i.e. by CZK 20.4 billion. After adjusting regional expenditure for direct expenditure on education and subsidies for private schools1, adjusted expenditure amounted to CZK 159.2 billion. The year-on-year growth was especially attributable to current expenditure (increase 5.8%, or CZK 15.6 billion), which amounted to CZK 283 billion. Transfers to contributory and similar organizations amounted to CZK 210.2 billion and accounted 74.3% 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 13.4% year-on-year, i.e. by CZK 4.8 billion, to CZK 40.5 billion, mainly due to increased investment in museums, galleries 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.
Management of Municipalities
In November 2025, municipalities had a surplus of CZK 16.1 billion and recorded a year-on-year decline of 60% (see Chart No. 3). Of this, the budget of the capital city of Prague ended with a surplus of CZK 22.5 billion (a year-on-year slight decline) with total revenues of CZK 131.4 billion and expenditures of CZK 108.9 billion. Excluding the City of Prague, the total consolidated revenues of municipalities amounted to CZK 339.3 billion, expenditures to CZK 345.7 billion, and the budgetary result even ended in a deficit of CZK 6.4 billion.
Total municipal revenues in November reached CZK 470.7 billion, representing a year-on-year increase of 4.8%, or CZK 21.7 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 445.4 billion. Municipalities' own revenuesi, which accounted for 85.3% of total adjusted revenues2 in November, recorded year-on-year growth and reached CZK 379.9 billion.
This was mainly due to tax revenues, which rose by 4.9% year-on-year, i.e. by CZK 14.8 billion, to CZK 319 billion. The most significant year-on-year increase was in corporate income tax revenues, which rose to CZK 77.1 billion, where the effects of changes effective from 2024 were felt, in particular the increase in the tax rate, which already affected the amount of advance payments in the third quarter of this year. Income from personal income tax also increased year-on-year to CZK 66 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 137.7 billion. Other tax revenues amounted to CZK 38.2 billion (of which CZK 17.1 billion was from real estate tax) and recorded only slight growth.
By the end of November, municipalities received transfers amounted to CZK 90.8 billion (year-on-year growth of 11.4%, i.e. CZK 9.3 billion). Of these, non-investment transfers amounted to CZK 65.8 billion and increased year-on-year more than 7.9%. Investment transfers received by municipalities recorded year-on-year growth, reaching CZK 25 billion.
Total municipal expenditure in November 2025 amounted to CZK 454.6 billion, representing a year-on-year increase of 11.4%, or CZK 46.4 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 431.1 billion. The year-on-year growth was mainly due to an increase in current expenditures (by 7.9%, i.e., CZK 23.8 billion) to CZK 323.4 billion, in particular due to an increase in non-investment transfers to transport. Non-investment transfers to contributory and similar organizations, which amounted to CZK 81.2 billion, accounted for the largest share of current expenditures. Capital expenditure increased significantly compared to the previous year (by 20.8%, i.e. CZK 22.6 billion) to CZK 131.2 billion, mainly due to increased investment to municipal services.
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 November 2025, voluntary associations of municipalities managed total revenues of CZK 7.3 billion and total expenditures of 6.8 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