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.

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