Czech end-2013 budget deficit overshoots target thanks to cut in spending.

By bne IntelliNews January 3, 2014

The Czech central budget deficit shrank by 20% on the year to CZK 80.9bn (EUR 2.9bn) in 2013 beating the government’s target of CZK 100bn thanks mainly to lower-than-planned spending, data from the finance ministry showed. The deficit narrowed from CZK 79.4bn at end-November.

Total budget revenue in 2013 grew by 3.9% y/y to CZK 1.092tn, slightly exceeding the annual target. Revenue from taxes increased by 1.7% y/y to CZK 550bn with VAT collection improving by a strong 10.3% y/y to CZK 220.2bn, while excise taxes declined by 2.3% y/y. The rise in VAT revenue was partially thanks to a 1pp rise in both VAT rates as of Jan 1.

Budget expenditures posted a mild 1.8% y/y increase to CZK 1.17tn in 2013, equalling to 98.5% of the annual plan. The lower-than-planned expenditure came as the government decided to spend less on transportation infrastructure project and social benefits, the finance ministry said adding that the preliminary budget figure will be slightly revised as total revenue maybe lower by CZK 40mn.

In its latest macroeconomic forecast published in October, the finance ministry said it projects 2013 public sector deficit that includes the central government budget, regional and local budgets, public funds and public health insurance, to account for 2.9% of GDP and stay at that level in 2014. This year’s state budget sets a deficit limit of CZK 112bn.

Central budget (CZK bn)          
  Jan-Dec 2013 Jan-Dec 2012 Change (%, y/y) 2013 adjusted budget plan Relation to plan
Revenues 1 092,23 1 051,39 3,9% 1 090,69 100,1%
Tax revenues (without contributions) 550,01 540,78 1,7% 554,23 99,2%
VAT 220,21 199,71 10,3% 212,00 103,9%
Excise tax 136,46 139,61 -2,3% 142,2 96,0%
Social and health insurance 372,07 371,5 0,2% 377,77 98,5%
Expenditure 1 173,13 1 152,39 1,8% 1 190,69 98,5%
Social benefits 488,02 481,12 1,4% 491,63 99,3%
Pensions 381,04 382,03 -0,3% 384,09 99,2%
Own payments to EU budget 37,23 34,84 6,8% 37,26 99,9%
Capital expenditures 103,22 113,62 -9,2% 115,95 89,0%
Balance -80,9 -101 -19,9% -100,00 80,9%
Source: Finance ministry

Related Articles

Czech judiciary denounces Poland's move to end separation of powers

Senior Czech judges on July 21 denounced Poland's judicial overhaul as an attack on the rule of law. With big street protests in the Czech Republic's neighbour seemingly gathering momentum – 120 ... more

Strongly profitable Czech petrochemical maker Unipetrol puts cracker explosion behind it

Unipetrol looks to have finally got over the August 2015 fire and explosion that wrecked its steam cracker, an indispensable installation in the production of ethylene feedstock needed to manufacture ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more

Dismiss