Czech government approved the 2013 budget proposal with a deficit of CZK 100bn, or 2.9 percent of GDP. This should keep the overall fiscal debt at around 40 percent of GDP. The 2013 budget, to be submitted to the Lower House on Friday, foresees total revenues at CZK 1.08 trillion and expenditures at CZK 1.18 trillion. The deficit reduction targets for 2014 and 2015 were softened to 2.7 and 2.4 percent of GDP, respectively, from the original 2.4 percent for 2014 and 1.9 percent for 2015.
Lowering the deficit below the 3 percent limit required by the EU will allow Czechs to enjoy the lowest debt financing costs in the region. Czech Treasury bond yields are currently below 2 percent, allowing the country to raise its fiscal debt financing more cheaply than Italy and only slightly above German costs, according to the server nasdaq.com.
