Prime Minister Petr Nečas said a reduction in spending in the 2011 state budget may lower economic output by as much as 0.7 percentage points from the government’s current forecast. The cuts are needed to keep the budget deficit from “pulling down” the economy, Nečas said in an interview on Czech television yesterday. Gross domestic product will grow 1.6% this year and 2.3% in 2011, after shrinking 4.1% in 2009, according to Finance Ministry forecasts.
