Notifications of the government deficit and debt

Notification of government deficit and debt

The notification of government deficit and debt is compiled for the past four years as a rule and submitted by each member state of the EU twice a year, regularly at the close of March and September, including a projection for the current year. The calculation of the aggregates requested relies on the methodology of the European system of national accounts (ESA 95). Pursuant to the Maastricht criteria, the deficit and the cumulated debt should not exceed 3% of GDP and 60% of GDP, respectively.

	Unit	Year
	Unit	2003	2004	2005	2006
Net borrowing (deficit) of general government (in current year)	CZK bn	-170 558	-80 918	-104 819	-94 485
General government consolidated gross debt (at end of year)	CZK bn	774 989	855 102	903 475	973 035
Gross domestic product (GDP)	CZK bn	2 577 110	2 781 060	2 970 261	3 204 086
General government deficit in % of GDP	%	6,62	2,91	3,53	2,95
General government debt in % of GDP	%	30,07	30,75	30,42	30,37

The government deficit/surplus and the government debt reflect the financial performance of all institutional units classified to the general government sector – they are governmental departments, territorial self-governing units, some semi-budgetary (subsidized) organizations, state and other extra-budgetary funds (e.g. Land Fund, Support and Guarantee Agricultural and Forestry Fund or Vine-grower Fund), Railway Infrastructure Administration, transformation institutions (Czech Consolidation Agency etc), public universities, and health insurance companies.

Government deficit/surplus – EDP B.9 - refers to net borrowing (-) or net lending (+) including interest on swap transactions. It shows the ability of the general government sector to finance other entities (+) or the need of the general government sector to be financed (-).

Government debt includes, by definition, liabilities of the general government sector resulting from currency emissions (not applicable to the CR), received deposits, issued securities other than shares (except for financial derivatives), and received loans.

The data shown in the table above were sent to Eurostat within the scope of the spring EDP notification on 30 March 2007. The data for 2004 and 2005 have been refined on the basis of more detailed and additionally arrived information on transactions of government institutions in 2004 and 2005. The data for 2006 have been compiled from preliminary data reported by government institutions, applying extrapolation methods and expert guesses.

The projection of government deficit and debt for the year 2007 is compiled and published by the Ministry of Finance.

Statement of the European Commission can be expected in the second half of April 2007.

Prague, 2 April 2007