Czech state surplus some way down on figure for this time last year

The Czech Republic’s state budget surplus had risen to CZK 25 billion at the end of July, up from CZK 4.6 billion at the end of the previous month, according to data released on Tuesday by the Ministry of Finance. But the surplus is some way below the CZK 75.6 billion recorded at the end of July 2016.

Photo: WerbeFabrik / Pixabay, CC0Photo: WerbeFabrik / Pixabay, CC0 The main reason for the gap has been a decline in money received from the European Union.

It shrank by around CZK 77 billion in the first seven months of 2017 compared to the same period last year, reflecting a spike in the flow of money from Brussels to the Czech Republic in the first half of 2016.

After adjusting revenues and spending for EU money, the budget to the end of July ended with a surplus of CZK 5.6 billion this year. Last year the equivalent figure was CZK 8.4 billion, the Ministry of Finance said.

The minister of finance, Ivan Pilný, told Czech Television that when EU funding, which was extremely high last year, is factored out of the operation of the state budget it is currently around CZK 16 billion healthier than it was a year ago.

However, some opposition representatives say that things ought to be even better, arguing that far greater efforts must be made to access the available funds from Brussels.

The head of the Communist Party, Vojtěch Filip, said it was clear that individual Czech ministries lacked a plan for drawing on the available EU money.

Komerční banka economist Marek Dřímal told Czech Television that the Czech Republic needed to greatly accelerate the drawing of EU funds in the remainder of this year and in 2018.

The Czech state has until the end of next year to draw on around CZK 80 billion from EU operational programmes approved in 2015. If it fails to do so, it will miss out on the funding, Mr. Dřímal said.

He also warned of a risk of a deeper budget deficit in 2018 due to the fact there tends to be a lag in the flow of EU money.

Mr. Dřímal told Czech Television that he expected the budget deficit to reach around CZK 45 billion this year, pointing out that the state’s expenditure tends to grow in the second half of the year.

A budget deficit of CZK 60 billion has been approved for 2016.

Minister Pilný is currently involved in an intensive round of talks with fellow cabinet members over their departments’ budgets for next year.