Notification of government deficit and debt - 2021 (First notification, data sent to Eurostat)

For the year 2021, the balance of the general government sector ended up with a deficit corresponding to 5.9% of the GDP. The general government sector debt in the end of the year 2021 reached 41.9% of the GDP while the year-on-year increase was by 4.2 percentage points (p. p.).

“The balance of the general government sector ended up with a deficit in the amount of CZK 359.4 bn and the amount of the debt reached 41.9% of the GDP,” Helena Houžvičková, Director of the Government and Financial Accounts Department of the CZSO, stated.

The largest share on the result continued to mainly belong to the balance of the central government that reached the deficit of CZK 385.0 bn. The local government sector balance ended up with the surplus of CZK 34.6 bn and the social security funds sub-sector (of health insurance companies) ended up with the deficit of CZK 9.0 bn.

Table 1: Notification table of government deficit and debt, the Czech Republic, 2018–2021

The general government sector balance for the year 2020 has been revised by CZK 10.3 bn due to an increase of expenditure of health insurance companies based on updated accounting statements. Following a consultation with Eurostat, the methodology of capture of part of fees directing on the so-called nuclear account has been modified; the fees are not considered to be the revenue of the general government any more. The following table shows how this modification influenced the general government sector balance in 2018 to 2020:

Table. 2: Impact of revision in recording of nuclear account payments , 2018–2020

The total general government sector revenue increased in 2021 by 4.8%, y-o-y; in absolute terms, it was an increase by CZK 113.4 bn. Revenues from social contributions and from taxes on production and imports were increasing the most. The biggest decrease was recorded for income taxes.  

The total general government sector expenditure increased in 2021 by 5.3%, y-o-y; i.e. by CZK 143.5 bn. The highest increase was recorded for social benefits paid, compensation of employees paid, and subsidies, payable.  

In the end of 2021, the relative debt of the general government reached 41.9% of the GDP. In the year-on-year comparison, the relative debt increased by 4.2 p. p. An increase in the nominal GDP contributed to a decrease of the relative amount of the debt (-2.6 p. p.), whereas the nominal amount of the debt increased in relation to the GDP by 6.8 p. p..

In the end of 2021, the general government debt reached CZK 2 566.6 bn; major part of it consists of issued debt securities the volume of which increased by CZK 346.1 bn, y-o-y.

Indicators presented in the Table 1 were transmitted to Eurostat on 31 March 2022.

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

The government debt consists of consolidated liabilities of the general government sector in the form of currency and deposits, issued debt securities, and received loans. In case of foreign exchange debt instruments hedged against currency risk, value in CZK is obtained by means of a contractual exchange rate.