Czech Republic set for record budget surplus says Babis

By bne IntelliNews October 25, 2016

The Czech state budget will end in surplus this year, Finance Minister Andrej Babis said on October 25. A positive balance above CZK10bn would be the best ever budget result for the country since it split from Slovakia in 1993.

Despite hugely positive figures throughout the year, Babis has been coy on predicting a surplus. However, he now appears confident enough that the traditional rise in spending in the fourth quarter will not push the balance back into a deficit. The minister also noted that state debt will fall this year for the first time since 2011.

The budget surplus hit yet another new record in September, as it pushed to CZK82.3bn (€3bn), the highest level at that point in the year since records began. That appears to have pushed Babis to finally predict a full-year surplus. Previously he had only suggested a balanced budget was possible, despite claims from Jiri Rusnok, governor of the Czech Central Bank (CNB), that a surplus is due.

September was the fourth month in a row to deliver a record, as improved tax collection drove the surplus higher. The budget produced a deficit of CZK2.77bn in January-September 2015. This year’s budget plan envisages a deficit of CZK70bn, while the plan for 2017 – in which Babis hopes to win elections to take control of the government from current coalition partner CSSD – targets a CZK60bn gap.

Related Articles

Hungarian retail investors continue to pile into domestic government bonds

The stock of government bonds held by households rose by HUF154bn (€500mn) September to an all-time high of HUF6.5 trillion, Hungary’s Government Debt Management Agency (AKK) said on October 16. ... more

Ukrainian central bank bans Russian banknotes, coins depicting occupied territories

The National Bank of Ukraine (NBU) has forbidden local banks and the country's financial institutions to perform any cash transactions using the new banknotes and coins issued by the Russian central ... more

Erdogan says he plans talks with lenders on cutting Turkish interest rates

Turkey's President Recep Tayyip Erdogan said on October 13 that he plans to hold talks with both public and private lenders on how to lower interest rates. He did not say, however, when those ... more