Czech budget deficit lower than expected

The Czech economy performed worse than expected in 2012 with budget revenues coming in CZK 42.6bn lower than forecasted. However, austerity measures on expenditures saved the government CZK 47bn. As a result, the government ended 2012 with a CZK 101bn deficit, or 3.5 percent of GDP, which was what lawmakers were aiming for.
Finance Minister Miroslav Kalousek said the government was aware of the fall in revenues which is why it increased savings. “The macroeconomic forecast deteriorated steeply in autumn 2011. It became clear that tax revenues will be lower than stipulated in the budget documentation,” Kalousek told ČTK. “We had forewarned about this in the budget approval process and promised that we would make relevant corrections on the basis of the January prediction, which we did in March. Thanks to these savings, we fulfilled the deficit plan with a sufficient reserve.”