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GDP growth may slow to 3.6 – 3.8% in ČR in 2009

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Prague, Oct 12 (CTK) – Czech economic growth could possibly decelerate to
3.6 percent to 3.8 percent next year, which would require cuts in the state
budget spending worth Kc10-12bn, Deputy Finance Minister Eduard Janota said
in a discussion programme on the Czech Television (CT) Sunday.

The Finance Ministry originally counted on GDP growth of 4.8 percent next
year on the basis of which it had drafted the state budget for next year.

The Czech National Bank (CNB) also foresees economic slowdown to 3.6
percent in 2009.

“Our calculations are now at similar levels (with the central bank),”
Janota said in the discussion programme “Questions of Vaclav Moravec” on CT.

“If the economy slows to 3.7 percent next year, then the spending cuts will
amount to Kc10-12bn. We get ready for these cuts,” said Janota.

The possibilities of the government to cut budget spending are limited. A
change in mandatory spending, for instance, that makes up around a half of
the state budget would have to be approved by parliament, said Janota.

Martin Bursik, deputy prime minister and chairman of the junior ruling
Greens, said that the government agreed earlier that if the economic growth
forecast for next year changes its spending will change as well.

Mainting the low budget deficit is the priority, said Bursik.

Finance Minister Miroslav Kalousek said he was considering submitting a
proposal to the cabinet at the turn of the year to tie part of the planned
expenditures of the ministries to budget revenues. If the latter develops
favourably, the ministries could get their money.

The government has approved the state budget for next year with a deficit
of Kc38.1bn, with expenditures at Kc1,152bn and revenues at Kc1,114bn.

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