Government deficit and debt - 4. quarter of 2018

In Q4 2018, the general government sector balance decreased by CZK 12.0 bn, y-o-y, which was contributed to mainly by the central government. The central government balance decreased by CZK 10.9 bn, y-o-y, to CZK 1.5 bn, which was contributed to by an increase in both current and investment expenditure. Local government performance ended up with the deficit of CZK 12.9 bn, which was higher by CZK 5.9 bn, y-o-y. On the contrary, social security funds balance improved by CZK 4.7 bn, y-o-y, to CZK 1.6 bn.

The general government sector balance, Q4 2016 – Q4 2018

Note: Data in the table are not seasonally adjusted and cannot be compared quarter-on-quarter.

The total government revenues increased by 8.4%, y-o-y. Especially the following contributed to the y-o-y increase in revenues: growth of revenues from received social contributions (+10.3% to CZK 218.2 bn), taxes on production and imports (+4.6% to CZK 175.2 bn), taxes on income (+7.1% to CZK 110.7 bn), capital transfers (+10.6% to CZK 17.5 bn), and current transfers (+39.4% to CZK 16.2 bn). The total government expenditure increased by 10.7%, y-o-y. The following contributed the most to the expenditure growth: increase in the volume of investment expenditure (+39.1% to CZK 63.9 bn), intermediate consumption (+11.0% to CZK 108.6 bn), compensation of employees (+8.3% to CZK 141.5 bn), and social benefits paid (+6.2% to CZK 157.7 bn).

The government debt ratio decreased from 34.66% to 32.71% of GDP in the year-on-year comparison. The increasing nominal GDP contributed to a decrease in indebtedness by 1.68 p. p. The nominal debt of the general government decreased by 14.5 bn to 1 735.1 bn and its contribution amounted to 0.27 p. p. In the quarter-on-quarter comparison, the debt ratio decreased by 1.22 p. p. The general government debt decreased by CZK 41.6 bn, quarter-on-quarter, and contributed to the decrease in the debt ratio by 0.79 p. p., while the influence of the increasing GDP was 0.42 p. p.

Regarding the debt structure, there was a decrease in issued debt securities both in the y-o-y comparison (−2.0%) and in the quarter-on-quarter comparison (−4.7%); however, debt securities remain to be a major part of the debt with the share of 89.6%. In the quarter-on-quarter comparison there was also a decrease in received loans by 6.9%, the value of which, however, increased by CZK 30.6 bn, y-o-y.

Debt of the general government sector, Q4 2016 – Q4 2018

The government surplus/deficit is represented by the item B.9 “net borrowing (−) or net lending (+)” in the system of national accounts. It refers to the ability of the general government sector to finance other sectors of the economy (+) or the need of the general government sector to be financed (−) by other sectors of the economy in the given period.

The general government debt is the amount of consolidated liabilities of the general government sector comprising the following items: currency and deposits, debt securities, and loans. In case of foreign exchange debt instruments hedged against the currency risk, the value in CZK is obtained by means of the contractual exchange rate.

The general government sector balance is compared with the amount of GDP in the given quarter at current prices. The amount of consolidated general government debt is compared with the sum of quarterly GDP for the last four quarters at current prices. Fiscal indicators of quarterly government deficit and debt are published within the Transmission programme (Table 25 and Table 28) on the website www.czso.cz in the “GDP, National Accounts” section. (http://apl.czso.cz/pll/rocenka/rocenka.indexnu_gov?mylang=EN)

Responsible head at the CZSO: Petr Musil, Director of the Government and Financial Accounts Department, phone number: (+420) 274 052 308, e-mail: petr.musil@csu.gov.cz
Contact person: Jaroslav Kahoun, Head of Government Accounts Unit, phone number: (+420) 274 054 232, e-mail: jaroslav.kahoun@csu.gov.cz
Next News Release will be published on: 1 July 2019