In the second quarter 2015, balance of government institutions expressed as a percentage of GDP has reached surplus 1.39 percent. Compared to the second quarter of 2014, deficit has been reduced by almost 2.01 percentage points (p.p.).

Surplus/Deficit of government institutions, the Czech Republic, 2.Q2014-2.Q2015

Notice: data are not seasonally-adjusted; data cannot be compared quarter-to-quarter

Final balance has been improved at all level of general government sector, i.e. central and local government institutions and health insurance companies. The main factors of annual total growth of revenues (8.7 %) have been revenues from taxes, social contributions and investment subsidies from the European funds. Higher inflow of EU funds has promoted rise in the investment expenditures which have been together with rising compensation of employees the main factor driving the annual growth of expenditures (3.6 %).

The Czech government consolidated gross debt has decreased on the annual basis by 2.0 percentage point to 41.69 percent of GDP. Decreasing trend is driven mainly by rising nominal GDP and stabilised level of the state debt constituting a dominant part of the total government debt. Compared to the first quarter 2015, the indebtedness has been reduced by 0.75 p.p.

Debt of government institutions, the Czech Republic 1.Q2014-1.Q2015

Shares of relevant instruments on the total debt remain stable over time with dominant position of debt securities (90 percent).

The revision has been caused mainly by reclassification of selected units into general government sector; the classification of semi-budgetary organisations has been unified so that all units of this legal form are currently classified as government institutions. The same holds true for public hospitals with legal forms other than semi-budgetary organisations which are newly treated as government institutions. At the same time, the CZSO has implemented new approach to statistical recording of the liquidity system operated under the State treasury. This measure has impacted the financial relations within general government sector with negligible impact on the amount of consolidated government debt due to limited involvement of units classified outside general government sector.

Deficit is compared with nominal GDP in given quarter. The amount of consolidated debt defined as sum of the items Currency and deposits, Debt securities and Loans, is compared with the sum of nominal GDP for the last four quarter. Fiscal indicators of quarterly government deficit and debt are regularly published within the Transmission programme (table 25, table 28) on the web www.czso.cz in the section “GDP, National Accounts” (http://apl.czso.cz/pll/rocenka/rocenka.indexnu_gov?mylang=EN)

This press release has not been edited for language.