Public expenditure ceilings are defined in §30aa of Act No. 523/2004 Coll. on the general government budgetary rules. It is the maximum allowable level of government expenditure set in accordance with the net expenditure growth path, which is given by the national medium-term fiscal-structural plan. The government submits the plan for approval to the European Commission.
Since 1 August 2024, the public expenditure ceilings calculation was fully linked to reformed European fiscal rules and is calculated by the Ministry of Finance. The ceilings are subsequently approved by the government for the period of all years for which the general government budget is prepared. The ceilings are then approved by parliament.
Public expenditure ceilings are calculated based on the net primary expenditure, which includes the maximum accrual consolidated general government expenditure net of interest expenditure, expenditure on EU programs fully matched by revenue from EU funds, expenditure from the Recovery and Resilience Facility, mandatory national expenditure on co-financing of programs funded by the EU, cyclical elements of unemployment benefits expenditure and one-off expenditure. The resulting ceiling also includes the effects of discretionary revenue measures, which allow the government to consolidate on the revenue side of the budget as well.
RRZ assesses and publishes a report on the compliance with the expenditure ceilings and reviews the compliance of reported budgetary outturns data with the net expenditure path trajectory, including the analysis of the factors which explain potential deviations from the trajectory.