In Q4 2020, the general government sector balance reached the deficit of CZK 141.6 billion, which corresponded to 9.4% of GDP. Income of the general government sector reached 41.8% of GDP, whereas expenditure amounted to 51.2% of GDP. The government debt ratio increased by 7.8 p. p., year-on-year (y-o-y), to 38.1% of GDP.
In Q4 2020, the general government sector balance worsened by CZK 117.5 bn compared to the corresponding period of the previous year, which was contributed to mainly by the central government, the balance of which worsened by CZK 101.5 bn, y-o-y, and ended up with the deficit of CZK 113.1 bn. The local government sector balance reached the deficit of CZK 20.6 bn, whereas in the previous year it was only CZK 10.2 bn.
Social security funds performance worsened by 5.6 bn, y-o-y, and reached the deficit of CZK 7.8 billion, reads the recent data of the Czech Statistical Office.
The total government revenues increased by 0.8% compared to the corresponding period of the previous year. Especially the following contributed to the y-o-y increase in revenues: growth of revenues from social contributions (+8.4% to CZK 252.1 bn) and from taxes on income (+4.4% to CZK 129.0 bn). On the contrary, revenues decreased the most from the following: property income (-41.1% to CZK 3.8 bn), capital transfers (-29.2% to CZK 12.6 bn), current transfers (-6.9% to CZK 15.0 bn), and taxes on production and imports (-5.5% to CZK 171.5 bn).
The total general government expenditure increased by 18.9%, y-o-y. Expenditure on the following increased the most: subsidies (+58.9% to CZK 50.4 bn), other current transfers (+53.9% to CZK 32.1 bn), social benefits (+21.6% to CZK 276.0 bn), and compensation of employees (+16.7% to CZK 184.3 bn).
The government debt ratio increased, year-on-year, from 31.8% to 38.1% of GDP while the decreasing nominal GDP contributed to an increase in indebtedness by 0.5 p. p. The nominal debt of the general government increased, y-o-y, by CZK 413.1 bn to CZK 2 153.0 bn and its contribution amounted to 7.3 p. p. In the quarter-on-quarter comparison, the debt ratio dropped by 0.3 p. p. The nominal debt decreased by CZK 19.9 bn, q-o-q, and contributed to the decrease of the debt ratio by 0.4 p. p., while the contribution of the GDP was 0.0 p. p.
In the fourth quarter of 2020, the debt slightly decreased while the general government sector balance was in deficit. Both the deficit and the decrease of the debt were mainly covered by a decrease in the volume of financial assets held, especially of currency and deposits.
Regarding the debt structure, the following increased, year-on-year: issued debt securities (CZK +416.1 bn) and deposits (CZK +5.8 bn), whereas the volume of received loans decreased by CZK 8.7 bn. The share of issued debt securities increased by 1.7 p. p. to 93.4% and issued debt securities remain to be the main debt component. In the quarter-on-quarter comparison, the value of issued debt securities and the value of received loans decreased.
The general government sector balance after seasonal adjustment as well as adjustment for calendar effects ended up with a deficit of CZK 121.1 bn, which corresponded to 8.3% of GDP. In the q-o-q comparison, the balance worsened by CZK 35.5 bn. The development of the general government sector balance adjusted by seasonal and calendar effects is shown in the chart below.
