The Czech fiscal deficit will exceed the government’s target this year as the economy is set to stagnate after a contraction in 2012, according to European Commission forecasts.
The Czech public-finance deficit, the fiscal yardstick for assessing a European Union member’s readiness to adopt the euro, will be 3.1 percent of economic output in 2013, after two one- time operations widened the gap to 5.2 percent last year, the Brussels-based European Commission, the EU’s executive arm, said in the winter forecasts today. The government’s 2013 deficit target is 2.9 percent of gross domestic product.
The GDP will stagnate this year, after shrinking 1.1 percent in 2012, the commission said. The economy will expand 1.9 percent in 2014, according to the forecast. Gross debt will rise to 48 percent of GDP in 2013, from 45.5 percent, while consumer-price inflation calculated according to the EU methodology will slow to 2.1 percent, from 3.5 percent in 2012.
“The outlook for 2013 is one of stagnation as the domestic demand is projected to remain weak, while external demand is set to pick up and shore up output only in the second half of the year,” the commission said in the report.
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