Czech Finance Minister Miroslav Kalousek (TOP 09) has warned that the Czech state budget deficit by the end of the year is likely to climb way beyond the planned limit of Kč 135 billion.
Kalousek said the eventual deficit for 2011 could balloon to between Kč 140 billion and Kč 150 billion due to late payments to the Czech Republic from the European Commission.
Without the hold-up in European funds, the figures would have been better than expected both on the spending and revenues side of the equation, Kalousek said.
The eventual public deficit is likely to come in on course at 3.7-3.8 percent of GDP, still better than the 4.2 percent counted on mid-year. The public finance deficit was 4.7 percent in 2010.
Misuse of funds?
Payments from three European programs have been stalled, according to the Ministry of Finance, due to fears in Brussels that they are not proceeding properly and amid suspicions that corruption could be involved. The programs are the regional program for the northwest of the country, covering the Ústí nad Labem and Karlovy Vary regions; and sectoral programs covering transport and the environment.
The government has agreed a 3.5 percent state deficit for 2012, amounting to Kč 105 billion; though most analysts now believe that figure will prove too optimistic due to sluggish economic growth or even recession. Longer term, the government is aiming for a balanced budget by 2016.
The Czech Statistic Office (ČSÚ) recently revised last year’s government deficit with the final figure widening to Kč 182.7 billion from the original Kč 172.8 billion. This translates into a debt ratio of 4.84 percent of debt compared with GDP as opposed to an earlier 4.71 percent.
