Czech budget deficit shrinks 10.1% y/y in Sept 2014

By bne IntelliNews October 2, 2014

The Czech central budget deficit shrank by 10.1% y/y to CZK 34.39bn (EUR 1.3bn) as of end-September 2014 thanks to higher revenue, the finance ministry said. The gap, however, widened from a month earlier when it stood at CZK 14.76bn.

This year’s budget envisages a deficit of CZK 112bn but it had been posting surpluses up to end-July suggesting the end-year reading may be below the plan. Finance minister Andrej Babis said on October 1 he expects the budget to produce a deficit of CZK 80bn this year even after additional costs for raising public sector wages have been factored in.

Total budget revenue in the first nine months of the year grew 2.5% y/y to CZK 826.4bn, accounting for 74.7% of the annual target. Revenue from taxes jumped by 5% y/y to CZK 420.4bn with VAT collection improving by 5.1% y/y and excise taxes climbing 2% y/y.

Budget expenditures ticked higher by 1.9% y/y to CZK 860.8bn as of end-September, equalling to 70% of the annual plan. Social benefits that make up over 40% of all expenditures approved for this year increased by 1.5% y/y to CZK 365.1bn.

In September alone, the budget produced a deficit of CZK 19.6bn, up from CZK 2bn registered in the same month of 2013.

Central budget (CZK bn)          
  End-Sept 2014 End-Sept 2013 Change (%, y/y) 2014 adjusted budget plan Relation to plan
Revenues 826,38 806,42 2,5% 1116,91 74,7%
Tax revenues (without contributions) 420,38 400,51 5,0% 562,54 74,7%
VAT 166,31 158,27 5,1% 218,7 76,0%
Excise tax 99,01 97,06 2,0% 139,4 71,0%
Social and health insurance 283,62 276,77 2,5% 382,88 74,1%
Expenditure 860,77 844,66 1,9% 1228,91 70,0%
Social benefits 365,06 359,71 1,5% 502,79 72,6%
Pensions 282 279,36 0,9% 387,37 72,8%
Own payments to EU budget 29,48 31,83 -7,4% 36,4 81,0%
Capital expenditures 59,65 58,39 2,2% 101,37 58,8%
Balance -34,39 -38,24 -10,1 -112 30,7%
Source: Finance ministry
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