Meanwhile, in the Czech Republic: 2016 ends with a budgetary surplus

Post date: Nov 20, 2016 6:49:43 AM

Meanwhile, in the Czech Republic: 2016 ends with a budgetary surplus

The Czech Republic is on its way to end the financial year with a budgetary surplus for the first time in over two decades. The president of the Central Czech Bank, Jiri Rusnok, said on the 26.9.2016, that the Czech Republic is projected to end the year 2016 with a budgetary surplus. By so doing the Czech Republic will be joining an exclusive and prestigious club of European Union states who have a budgetary reserve. This club currently includes only Germany, Estonia and Luxemburg, while the other European states are still struggling to emerge from the economic crisis.

The official Czech Republic governmental budgetary target for the year 2016 was a deficit of 0.6% of the governmental revenue (140 billion Czech Korunas). By July, this target was changed to a deficit of no more than 0.3 percent due to budgetary surpluses: a surplus of 41 billion Czech Korunas in June, growing to a surplus of 75.6 Czech Korunas in July. In fact, over the first eight months of 2016, the Czech budget showed a surplus of 81.2 billion Korunas. This is the highest budgetary surplus for this stage of the year since 1993, the year Czechoslovakia peacefully separated into the independent Czech Republic and Slovakia.

Although a few additional months are left to the end of 2016, the President of the Central Czech Bank is optimistic: “There is no doubt that the year 2016 will end with a budgetary surplus since we already have a surplus at this time.” He says, “This is an unusual phenomenon in a state which aims to become one of the most economically developed states in the world.” He noted that unemployment in the Czech Republic is currently at its lowest level for 15 years and that the inflation is also much lower than expected.

In the event that the year 2016 ends with a surplus, this will be the fourth time that the Czech budget exceeds expectations. The Czech minister of finance, Andrej Babis, has noted that usually expenses in the last months of the year increase so that the expectations for a budgetary surplus might change. As a result, he set a budgetary aim for 2017, which includes a deficit of 60 billion Czech Korunas. Nonetheless, it seems that the year 2017 will end with a lower deficit than that, or perhaps even a surplus. If this should be the situation then the Czech Republic will have further strengthened its reputation as one of the fastest growing economies in Europe.

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