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%|
|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%|
|Own payments to EU budget||37,23||34,84||6,8%||37,26||99,9%|
|Source: Finance ministry|
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