The estimated deficit close to 4 billion euro (Budgetary Traffic Light July 2022)

  • 8. 8. 2022

Secretariat of the Council for Budget Responsibility (SoCBR) estimates General Government Budget (GGB) deficit amounting to EUR 4,0 billion

• SoCBR has slightly increased the estimated level of GGB deficit in 2022. A negative difference compared to the June forecast amounts to EUR 59 million (0.1 % of GDP). Under the assumption that the government does not take additional measures, the deficit can reach the amount of EUR 3.972 billion (3.7 % of GDP).

• Estimated deviation between the SoCBR’s forecast for GGB deficit in 2022 and approved government budget remains positive and amounts to EUR 1 242 million (1.1 % of GDP), which means that the risk of public deficit rising above the government objective is low. However, development of public finances is still affected by high uncertainty due to a rapid rise in the price level and the war conflict in Ukraine.

• Tax and levy revenues represent the most significant positive impact on the estimated level of deficit by EUR 1 833 million (1.7 % of GDP). We expect higher budgetary revenues especially from taxes, where high inflation increases the growth of macroeconomic bases compared to budget assumptions (especially labor taxes and VAT).

• The estimate also includes the payment of a one-time 500 EUR bonus for employees in the state and public service agreed as part of the collective agreement, the impact on the deficit amounts to EUR 228 million (0.2 % of GDP).

• The total fiscal impact of government measures related to the war in Ukraine amounts to EUR 344 mil. (0.3% of GDP). Due to missing information, SoCBR does not expect reimbursement of expenditures from EU resources.

• Absorption of EU funds and RRP is still lower than previously expected, what is reflected in low levels of co-financing expenditures compared to the budget by EUR 278 million (0.3 % of GDP).