Prague - The Czech Finance Ministry expects the budget deficit to drop to 3 percent of GDP this year, the ministry revealed in its fiscal outlook report.
In the last two years, the deficit decreased from 4.83 percent of GDP in 2010 to 3.09 percent in 2011.
The three percent of GDP limit is one of the EU's so-called euro convergence criteria.
However, two days ago, the European Central Bank (ECB) said that none of the eight EU member countries interested in joining the euro, the Czech Republic including, are ready yet.
The ministry expects the budget deficit to further decrease to 2.9 percent of GDP in 2013 and 1.9 percent in 2014.
The target for 2015 is the deficit of 0.9 percent of GDP. After 2016, the Czech Republic will run a balanced government budget, believes the ministry.
"It is necessary to understand that in spite of cost-saving measures, the structural deficit reaches 2 percent of GDP. That's why we must carry on with the consolidation of public budgets and further implementation of cost-saving measures," said Finance Minister Miroslav Kalousek.
In its latest report on inflation, the Czech central bank estimated the 2012 deficit at 3 percent of GDP. In February 2012, it expected a 3.4 percent deficit.
However, the bank's 2013 budget deficit forecast remains at the originally estimated 3.8 percent.
autor: Radek Pecák