Per capita debt of Czech municipalities up 1.2 pct at Kc5,176-CCB

Municipalities' per capita debt is around 18 times lower than per capita state debt which reached Kc94,417 last year, CCB representative Pavel Finger said at a press conference today.

Statutory towns posted the largest per capita debt of Kc9,433 last year, an increase of 4 percent compared with the year 2007.

The reason for the high debt is also the fact that budgets of these towns are higher and their municipalities have greater opportunities to implement various projects and provide more services.

In contrast, rural municipalities showed the lowest per capita debt which was also 4 percent higher and reached Kc3,295. In smaller towns, the debt grew moderately to Kc4,148.

The amount of the debt was different in individual regions. The municipal debt was the highest in the Jihomoravsky region where it amounted to Kc10,760 last year. Municipalities in the Karlovarsky region had the lowest debt of Kc1,740.

Per capita municipal debt showed the biggest increase in the Liberecky region where it rose by almost a half to Kc8,260 per head.

The main reason behind the high debts of municipalities in the Jihomoravsky region is the debt of the city of Brno which reached Kc20,289 per head in 2008.

The growth in the per capita debt in the Liberecky region was also above all due to the increase in the debt of the city of Liberec which rose by almost Kc1bn year-on-year.

"Regions where there is a large number of small municipalities have in general lower debts than regions where the share of small municipalities is lower," CCB project manager Jan Cikler said.

Budgets of Czech municipalities posted a surplus of Kc8.5bn in 2008 thanks to a growth in revenues, which was an increase of 28 percent compared with 2007, CCB said.

Per capita result amounted to Kc924 and the account balance was Kc5,270.

Municipalities' total revenues reached Kc203.2bn last year above all thanks to a growth in capital and tax revenues.

Czech municipalities sold assets worth Kc15.4bn last year, an increase of 30 percent year-on-year. Their tax revenues grew by one-tenth to Kc108.8bn, CCB said.

Expenditures only rose by less than 7 percent to Kc194.7bn. Current expenditures increased by 7 percent to almost Kc140bn and capital expenditures added 6 percent to Kc54.8bn.

The volume of account balance grew by 17 percent to Kc48.3bn owing to the favourable development of the ratio of revenues to spending.

The volume exceeded the total municipal debt for the first time since 2000 when the data started to be monitored in 2000. Municipal debt amounted to Kc47.4bn in 2008. The state debt increased to almost Kc980bn last year.

The development of municipalities' budgets is favourable compared with development of the state budget.

According to CCB's analysis which uses its own rating to evaluate the economic situation of municipalities, the share of municipalities with rating expressing low or medium risk is decreasing, while the share of municipalities with rating indicating future problems is falling.

The analysis comprises data on 5,476 rural municipalities with less than 3,000 inhabitants, 740 towns and 23 larger statutory towns, excluding Prague.

The municipal debt is calculated using the methodology of the EU's statistical office Eurostat which is also used by the Finance Ministry. It comprises bank loans, municipal loans, repayable financial help and loans from state budgets and state funds.

CCB - Czech Credit Bureau, established in 2000, is a 100 percent subsidiary of company CRIF which is one of the largest firms in the world operating loan registers and providing banking credit information.

Autor: ČTK
www.ctk.cz