Czech budget gap shrinks 46% y/y in Jan-Aug on higher VAT collection, EU inflows

By bne IntelliNews September 3, 2013

The Czech central budget deficit shrank by 46% on the year to CZK 36.21bn (EUR 1.4bn) in the first eight months of 2013 thanks to higher revenue from value added tax and EU funds, data from the finance ministry showed. The end-August deficit was the best result since 2008 and accounted for 36.2% of the full-year target suggesting that the government will likely be able to meet the end-year deficit target of CZK 100bn despite higher spending to remove damages from the floods that hit the country in early June. The end-Aug gap, however, widened from CZK 27.6bn at end-July.

Total budget revenue in Jan-Aug 2013 grew 5.8% y/y to CZK 703.5bn, accounting for 64.9% of the annual target. Revenue from taxes edged up by 0.1% y/y as VAT collection improved by 11.3% y/y to CZK 141.8bn, while excise taxes declined by 5.5% y/y. The rise in VAT revenue was partially thanks to a 1pp rise in both VAT rates as of Jan 1. Income from EU funds rose by CZK 32.9bn in the period.

Budget expenditures also increased but at the much slower annual pace of 1% to CZK 739.7bn as of end-Aug, equalling to 62.5% of the annual plan.

The Czech central state budget deficit shrank 29.3% on the year to CZK 101bn in 2012, overshooting the government's target of CZK 105bn as increased savings compensated for lower-than-planned revenue. The government targets the overall public sector deficit, including the central government budget, regional and local budgets, public funds and public health insurance, to account for 2.8% of GDP in 2013.

CZKbn Jan-Aug 2013 Jan-Aug 2012 2013 adjusted budget plan Relation to plan %
Revenues 703.49 665.12 1 084,03 64.9
Tax revenues (without contributions) 342.45 342.24 554.23 61.8
VAT 141.82 127.47 212 66.9
Excise tax 84.75 89.66 142.2,2 59.6
Social and health insurance 246.17 247.44 377.77 65.2
Expenditure 739.7 732.14 1 184,03 62.5
Social benefits 317.5 318.47 495.63 64.1
Pensions 248.3 252.18 389.84 63.7
Own payments to EU budget 28.95 25.62 36 80.4
Balance -36.21 -67.02 -100 36.2
Source: Finance ministry        

Related Articles

Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear ... more

Czech PM accepts new nominee for finance minister

Reducing the political tension in the country a little, Czech Prime Minister Bohuslav Sobotka accepted on May 17 the nomination of a new finance minister from coalition partner Ano. Meanwhile, ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss