Macroeconomic Forecast Czech Republic

February 2007 | Macroeconomic Forecasts

We currently forecast a noticeable deterioration of the fiscal deficit in 2007 and 2008, increasing from 3.2% of GDP in 2006 to 4.1% and 3.8%, respectively. Our projections are based on two separate judgements. Firstly, we are concerned by the parliament approving a budget with a CZK91.3bn deficit, given that 2006's fiscal deficit was exceeded by 31.2%. We believe that the next two budgets are likely to be subject to similar pressures, in particular in light of the current absence of much-needed budgetary reforms.

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