Czech government allocates $7.1 billion to mitigate inflation and energy price shock

PRAGUE, Aug 24 (Reuters) – The Czech government on Wednesday approved final plans for a reduced state-subsidized electricity tariff, in measures costing a total of 177 billion crowns ($7.12 billion). dollars) to ease the burden of soaring energy bills and inflation.

The new reduced energy tariff will help households as early as October and provide an average level of support of 15,000 crowns ($604), including 4,000 crowns already this year, government officials said.

As energy markets hit record highs in the wake of Russia’s invasion of Ukraine and the war now six months ago, European governments have rushed to help households and businesses to deal with mounting utility bills.

The energy tariff is aimed at households and is the costliest measure the government has taken so far.

“The government has set aside 177 billion crowns in total…the government is providing targeted measures, in different volumes and for different groups of people,” Prime Minister Petr Fiala said after a government meeting on Wednesday.

The total aid, equal to 2.9% of 2021 gross domestic product, also includes pension increases, one-time child benefit payments or a waiver of renewable energy payments for households among the measures taken to help people to manage soaring prices.

Inflation in the Czech Republic has reached a three-decade high of 17.5% and could approach 20% in the coming months, according to central bank and finance ministry forecasts.

($1 = 24.8180 Czech crowns)

Reporting by Robert Muller; Written by Jason Hovet; Editing by Angus MacSwan

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