On Monday 26 January 2026, the Czech government confirmed a package of materials that will fundamentally determine the economic, environmental and institutional shape of the coming period. Highlights include the approval of the draft state budget for 2026 and a new law on product ecodesign, both of which have real implications for public finances and the business environment.
The most discussed item of the meeting was the draft state budget for 2026. The government approved it with with a deficit of 310 billion crowns, which is one of the highest values in the modern history of the Czech Republic. The deficit is higher than the original government strategy and some estimates of the Budget Responsibility Act.
The draft budget includes income of approximately CZK 1.978 trillion a expenditure of approximately CZK 2.288 trillion (Critics warn that such a deficit could lead to inflationary pressures and slow the state's ability to respond to unforeseen crises, while the government argues that the budget better reflects real mandated spending and projects.
What's changing in the budget: defence, investment, salaries
Defence spending remains at around 2 % of GDP, in line with NATO commitments. Investment in transport infrastructure and social programmes has been increased by tens of billions to cover mandated spending by the Ministry of Labour and Social Affairs. The higher deficit also provides for public sector pay rises from April 2026 - specifically by between 2 % and 9 % by occupation, responding to union pressure.
The Ecodesign Act: a technological and environmental revolution
The government meeting also approved draft law on ecodesign of products and the exercise of state administration in this area. This law responds to new European requirements that are gradually transforming Czech legislation.
Products placed on the market will have to meet greener standards at the design stage, thus emphasising longer life, repairability, recyclability and lower resource consumption. Unlike the old rules, which were limited to energy efficiency of appliances, for example, the new framework covers a wide range of products - from textiles, footwear and furniture to electronics and building materials.
One of the breakthroughs is the introduction of Digital Product Passport, which will include information on the durability, materials and environmental impact of the product. Another specific change is prohibition of destruction of unsold goods, initially for textiles and footwear, with the possibility of expanding into other sectors.
The Government also dealt with personnel and institutional matters - for example, the appointment of members of the National Sports Agency Board, supplementary budgets for transport infrastructure funds and support for agriculture, and the Czech Republic's participation in proceedings before the Constitutional Court in certain legal matters.
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