The deficit of the state budget grew to CZK 34.8 bn at end of June, up from May's CZK 28.8bn, while in the same year-ago period the deficit stood at CZK 4.9 bn. Revenues at the end of June amounted to CZK 286.9 bn and spending equaled CZK 321.7 bn. The full-year budget was approved with a deficit of CZK 49 bn, including last year's loss of the state-held Konsolidacni banka KoB, projected at CZK 18.8 bn, and other operations of state financial assets and liabilities.
The Czech cabinet has approved a draft state budget for next year. The government yesterday confirmed its previous preliminary decision that the draft 2002 state budget would be completed with a deficit of CZK 10 bn. It did not set either the budget revenues or expenditures for the time being. The government will set final incomes and expenditures during its next meeting on the budget, which will take place roughly in two weeks. A change in macroeconomic forecast, which the Finance Ministry will complete by mid-July, may affect the definitive size of incomes and expenditures. It is also possible way how to increase planned revenues. However, there arise a question how reliable such a forecast would be. The government has to submit the final version of the draft budget to the Lower House by the end of September.
The FX market was absolutely calm yesterday, and the koruna strengthened from the open of 33.84 CZK/EUR to the closing level of 33.79 CZK/EUR.
The state 6.95/16 bond ended five basis points down from late Friday at 99.85/15, yielding 6.96/93 percent from 6.90/87. The state 6.75/05 fell five basis points to 102.10/40, yielding 6.07/98 percent from 6.05/96.
(David Marek)