Czech state budget shows Kc95.4bn deficit in May

The gap reached Kc71.4bn in May 2009. Full-year deficit has been projected at Kc162.9bn this year.

The state budget showed a record deficit of Kc192.4bn last year.

Finance Minister Eduard Janota said earlier in reaction to lower-than-expected social security revenues and approval of flood bonds that he planned further austerity measures this year applying to spending of the individual ministries.

Based on the earlier statement by Janota it is clear that the ministries´ blocked expenditures worth Kc6bn will not be released this year. Privatisation account spending will be reduced by Kc8bn. These steps are aimed at maintaining the planned public finance gap at 5.3 percent of gross domestic product.

The annualised budget gap is affected by last year´s transfer of money from reserve funds of the ministries to the state budget, according to the ministry.

"Adjusted for the transfer worth nearly Kc32bn the state budget data would be better than last year," the ministry said.

Budget revenues fell by Kc14.1bn on the year to Kc385.9bn at end-May. Without the money transfer last year, revenues would be higher this year compared with 2009.

Social security revenues amounted to Kc144.3bn, a year-on-year drop of 4.2 percent. A growth of 5.5 percent is projected for this year.

Tax revenues rose by Kc11.7bn to Kc183.3bn at the end of May.

"The year-on-year growth was influenced above all by higher excise duty and VAT revenues," said the ministry. Excise duty hike this year is part of the approved austerity package.

State budget expenditures increased by Kc9.8bn in a year-on-year comparison to Kc481.3bn in May.

Author: ČTK
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