Czech government slows or freezes pay increases to narrow budget gap | WSAU News / Talk 550 AM99.9 FM
PRAGUE (Reuters) – The new center-right Czech government will freeze civil servants’ salaries and cut previously announced salary increases for others as it seeks to narrow the budget gap amid inflation, announced Wednesday ministers.
The government, appointed earlier this month, has pledged to reduce the central government deficit in 2022 to less than 300 billion crowns ($ 13.66 billion), from 380 billion envisaged by the previous government .
“We are freezing the salaries of state administration employees… and for ourselves,” Labor and Social Affairs Minister Marian Jurecka told a press conference.
“We have found a compromise so that key frontline professions such as social and health services, teachers, the military, still have some increase.”
The reduction is a signal of the intention to save money, but is only a fraction of the overall savings ambition, with the freeze reducing central government spending by around SEK 4.7 billion compared to previous shots.
Teachers will get a 2% pay hike and health and social workers exposed to the coronavirus pandemic will get a 6% hike. The military and police will receive a monthly salary increase of 700 crowns.
The government will also prepare a law to freeze the salaries of politicians for next year.
Inflation climbed to 6% in November and is expected to hit around 8% by early 2022, as rising energy prices are accompanied by supply chain disruptions and a tight labor market .
Jurecka said the government had agreed to expand aid programs to help households hardest hit by rising energy prices.
The country will start 2022 on a provisional budget, and the cabinet plans to prepare its new project in the first quarter.
The finance ministry last forecast in November 2022 a public sector deficit of 4.4% of gross domestic product.
($ 1 = 21 9620 Czech crowns)
(Reporting by Jan Lopatka; Editing by Giles Elgood)