Notifications of the government deficit and debt
| Notification of government deficit and debt | September 2011 |
The notification of government deficit and debt is compiled for the past four years and submitted to the European Commission by each Member State of the EU twice a year, regularly at the end of March and September, including a projection for the current year. The calculation of the requested aggregates is based on the methodology of the European System of Accounts (ESA95). 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 organisational units of the state, territorial self-governing units, selected semi-budgetary (subsidized) organizations, state and other extra-budgetary funds (Land Fund, Support and Guarantee Agricultural and Forestry Fund, Vine-grower Fund, and other), Railway Infrastructure Administration, transformation institution Prisko, PPP Centre, public universities, public research institutions and health insurance companies, association and unions of health insurance companies and Centre for International Reimbursements. Since 2010, on the basis of a repeated test, several non-financial enterprises have been reclassified to the general government sector. At the same time, due to the same reason, selected semi-budgetary organizations have been reclassified to the non-financial enterprises sector and general government sector.
Government surplus/deficit – 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 (-) in the given year.
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 th September 2011. Data for the years 2007 to 2009 in comparison to the previous notifications have been updated by reason of a revision of annual sector national accounts and using more detailed and additionally obtained information on financial transactions in 2010. Based on the statistical questionnaires for 2010, the estimate of the acquisition of fixed assets in budgetary organizations has been increased (by CZK 8.1 billion).
The government deficit has been increased in the years 2007 by CZK 3.1 billon, by CZK 5.7 billion in 2009 and by CZK 9.9 billion in 2010. On the contrary, the government deficit decreased by CZK 14.4 billion in 2008. The main adjustments have been related to tax revenues, due to methodological change in the calculation of income tax (in compliance with the Eurostat decision). These adjustments had an impact on the share of the government deficit in GDP in the amount of maximally tenths of a percentage point.
Adjustments in the government debt were related to changes in the recording of financial leasing of the government units and also in the recording of financial transactions with loans at public universities, which led to the reduction of the government debt in 2007 to 2009.
The detailed description of major changes in the revised national accounts, including the general government sector is shown on the website of the Czech Statistical Office (GDP, national accounts).
The projection of government deficit and debt for the year 2011 is prepared and published by the Ministry of Finance of the CR.
The statement of the European Commission is expected on 21 October 2011.
Prague, 30 September 2011