Czech 2013 Budget Deficit of 80.9 Billion Koruna Beats Target

The Czech Republic’s 2013 budget deficit of 80.9 billion koruna ($4.01 billion) beat the 100 billion-koruna target after the government cut spending, the Finance Ministry said.

Total income totaled 1.09 trillion koruna in the period, while spending amounted to 1.17 trillion koruna, the ministry said in an e-mailed statement today in Prague. Spending was 17.6 billion koruna lower than planned after the government invested less into the transportation infrastructure and spent less on social benefits, the ministry said.

The preliminary budget figure will be “slightly” revised as total income maybe lowered by some 400 million koruna, the ministry said.

Czech gross domestic product shrank 1.3 percent from a year earlier in the third quarter, marking a seventh consecutive contraction as exports and investment fell. The $196 billion economy is struggling to return to growth after three years of government austerity crimped household spending and the euro-area debt crisis curbed demand for Czech exports.

The Ceska Narodni Banka left the two-week repurchase rate at what it calls a “technical zero” of 0.05 percent on Dec. 17. The bank maintained its commitment to sell the koruna to prevent it from “strengthening too much” beyond 27 per euro, and it will keep that level at least until beginning of 2015, Governor Miroslav Singer said.

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