Notifications of the government deficit and debt

Notification of government deficit and debt

April 2013

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.



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 at the end of March 2013. Deficit in 2011 was slightly changed due to adjustments of taxes. Government deficit for 2012 was considerably affected by church restitutions (59 billions CZK) and corrections of the EU-grants pre-financed by the State (returned transfer 12 billions CZK). Without these influences, the government deficit would reach 2.5% of GDP in 2012.

In the current notification, a methodological modification of the debt definition was implemented back to 2009; some government operations related to trade credits were re-classified as government debt (1.4 billion CZK in 2012) in line with the decision of Eurostat from July 2012. Considerable debt growth in 2012 was mainly caused by emission of government bonds exceeding the deficit; thus the rise in debts was to a certain extent connected with an increase in the stock of government deposits. Neither church restitutions (in form of financial compensation) nor corrections in the EU-grants have direct impact on the level of government debt.

On the part of the European Commision, no objections to the government deficit and debt results of the Czech Republic were raised.

The projection of government deficit and debt for the year 2013 is prepared and published by the Ministry of Finance of the Czech Republic.