The budget ended in a deficit of CZK 119.7 billion in February, the lowest since the creation of the Czech Republic
Prague – The state budget ended in a deficit in February 119.7 billion crowns, the Ministry of Finance reported today. It is the deepest February deficit since the creation of the Czech Republic. At the end of January, the state economy was in a deficit of 6.8 billion crowns, the government plans a deficit of 295 billion crowns for the whole year. Last year, the February deficit was 45.3 billion crowns, but the result was influenced by the provisional budget, which limited the monthly expenses of the state to one twelfth of the 2021 budget.
Budget revenues by the end of February reached 246.6 billion crowns, a year-on-year increase of 9.5 percent. So far, there is no collection of tax on extraordinary profits or a levy on excessive profits during electricity production. Expenditures increased by 35.4 percent to 366.3 billion crowns.
“February's state budget management is traditionally in a significant deficit. In addition, this year's budget deficit was deepened by tens of billions by the payment of valorized social benefits to vulnerable population groups, assistance to citizens and companies with energy prices, or pre-financing of social services and projects in the field of research, development and innovation. An increasingly strong negative swelling interest from old debts is also a factor,” said Finance Minister Zbyněk Stanjura (ODS) today.
“Although the budget already covers a whole range of extraordinary expenses and is still waiting for the first extraordinary revenues, it is clear that the growth of additional revenues is not yet able to compensate for the new expenses. We need all the more across the political spectrum a serious debate on austerity measures,” added Stanjura. Last year, the government estimated that extraordinary revenues should reach 100 billion crowns for the whole year. only about the report card for the first two months. At first glance, the additional 'inflationary' income is not enough for rapidly growing expenses, and the government must therefore look for ways to close the gap between expenses and income more,” said Raiffeisenbank analyst Vratislav Zámiš.
The collection of compulsory insurance premiums contributed the most to the year-on-year growth in income, from which the budget received 109.16 billion crowns, ten percent more than last year. Value added tax collection increased by 12.5 percent to 56.81 billion crowns. The state received 23.16 billion crowns from personal income tax, 28 percent more than a year ago. 21.88 billion crowns were collected for consumption tax, which represents a year-on-year decrease of 8.3 percent. The collection decreased mainly due to the transition of consumers to alternative tobacco products.
Budgetary expenditures grew mainly due to measures to solve the energy crisis, due to the payment of social benefits, especially pensions, and due to the servicing of the national debt. Expenditure on social benefits increased by 17.7 percent year-on-year to 144.3 billion crowns. Of this, 113.14 billion crowns were pension payments, which increased by 19 percent year-on-year. Transfers to entrepreneurs due to compensation for high electricity prices increased year-on-year by 155.4 percent to 30.93 billion crowns. Expenditures for servicing the state debt increased more than threefold to 16.4 billion crowns, mainly due to the January payment of interest on anti-inflation bonds.
According to the approved budget, this year the state should manage revenues of 1.93 trillion crowns and expenditures of 2, 22 trillion crowns. The deficit should be 295 billion crowns. Last year, the budget ended with a deficit of 360.4 billion crowns.
Komerční banka analyst Jaromír Gec assumes that the cabinet will not be able to comply with the planned budget this year. “This year's state budget deficit will probably exceed the 300 billion crown mark again. Although the budget calculates a deficit of 295 billion crowns, the additional extraordinary valorization of old-age pensions will, even in the case of approval of the government adjustment, bring additional expenses of about 15 billion crowns. The dynamics of tax revenues will in addition, to weaken the subdued growth of the domestic economy this year,” he said.
State finances in millions of crowns:
Zdr oj: Ministry of Finance