Notifications of the government deficit and debt
| Notification of government deficit and debt | September 2008 |
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.
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. which are finishing their activity), PPP Centre, public universities, public research institutions (semi-budgetary organizations till 2006) and health insurance companies, association and unions of health insurance companies and Centre of Interstate Settlements.
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.
Indicators given in the table were transmitted to Eurostat on 30 September 2008. In comparison to the spring 2008 notification, the 2007 data have been updated due to more detailed and additionally arrived information on transactions of government institutions. As a result, the deficit estimate is down by CZK 21.2 billion (from CZK 56.1 billion to CZK 34.9 billion) and in proportion to GDP down by 0.59 percentage points (from 1.58% to 0.99% of GDP). In contrast, general government debt estimate is up by CZK 1.3 billion (from CZK 1019.4 billion to CZK 1020.7 billion). Mainly updated information on increased tax revenues by CZK 5.3 billion and decreased capital expenditures including transfers free of charge of non-financial assets by CZK 9.2 billion was used in the calculation of the deficit; an investment grant amounting to CZK 5.8 billion was excluded from the central government expenditures because it was found to be a financial transaction.
The projection of government deficit and debt for the year 2008 is prepared and published by the Ministry of Finance CR.
Statement of the European Commission can be expected in the second half of October 2008.
Prague, 1 October 2008