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Gov’t approves 2016 state budget with 70-billion deficit

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Prague, Sept 23 (CTK) – The Czech government Wednesday approved the 2016 state budget bill with a 70-billion-crown deficit that includes increased spending related to the current migration wave and a pay rise for public sector employees, government spokesman Martin Ayrer has told CTK.

The Chamber of Deputies will be discussing the budget now. To take effect, the budget needs to be passed by the Chamber and signed by the president into law.

The budget expenditures have been projected at 1,251 billion crowns and the revenues at 1,181 billion.

The budget encourages “employment, investments, industry, security of the citizens and better public services,” but it “gradually decreases the deficit at the same time,” Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) said.

This year, the budget deficit is projected at 100 billion crowns.

The wages of teachers, doctors and nurses employed by state-run schools and hospitals, of police officers and firefighters, and clerks would be increased next year.

Sobotka said industrial zones would be built in the areas with high unemployment, key transport infrastructure would be constructed and investments in research and development would be increased.

Last week, he said money to cope with the migration crisis will be available in the next year’s budget, both in the budgets of the individual ministries and in the reserve for unexpected developments.

The leaders of the CSSD, the ANO movement and the Christian Democrats (KDU-CSL) that form the centre-left government, agreed last week that the health, labour and interior ministries would get hundreds of millions of crowns more from the budget within its restructuring.

The state-run forest management firm Lesy CR should contribute one billion crowns more to the budget. The state should get 6.6 billion crowns from Lesy CR and the Budvar brewery next year.

In August, the Finance Ministry raised both the budget revenues and expenditures by about 16 billion crowns.

According to the draft budget for 2016 and the outlook for the following years, the budget deficit will not exceed 3 percent of GDP, which is the maximum level required for the introduction of the euro.

In 2016, the budget deficit is to be 1.2 percent of GDP, and in 2017 and 2018 it is to be 0.8 and 0.6 percent, respectively

2016 draft state budget approved by Czech government (in billions of crowns):
results 2014 approved 2015 budget 2016 draft budget
State budget revenues 1,133.8 1,118.5 1,181.3
State budget expenditures 1,211.6 1,218.5 1,251.3
Budget deficit – 77.8 – 100 – 70

Source: Finance Ministry

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