Fiscal Outlook of the CR (April 2007)
The Ministry of Finance presents the first issue of a new publicationaddressing macroeconomic development in the Czech Republic. Until now, this role had been filled only by the traditional Macroeconomic Forecast, the content of which covered all the essential areas of macroeconomic development. In contrast, the Fiscal Outlook is directed to only a single sector of the national economy, that of general government.
The Fiscal Outlook ought to fill a certain gap in the Ministry of Finance’s range of publications. That portfolio includes a wide spectrum of information, starting from the approved state budget and its fulfilment to macroeconomic analyses and forecasts, but it has given only marginal attention to the general government sector. One of the new publication’s ambitions is to clarify and analyse relationships between the budget variables, general government finances and overall macroeconomic development.
This effort aims further to strengthen the transparency and comprehensibility of developments in public finances and fiscal policy.Toward that end, the text sheds light on the meanings of many indicators and interprets data on public finances. At the same time, we are presenting an outlook for general government finances that is consistent with the government’s current objectives. This general government outlook is neither an economic-political document (as is, for example, the Convergence Programme) whose main target would be to present the government’s objectives in the field of budgetary policy nor an autonomous macroeconomic forecast. The purpose is to project the governmental objectives onto the development of the main fiscal indicators. In principle, then, the Fiscal Outlook is consistent with the government’s targets. The benefit of the projection should consist in analysis of measures that lead to the respective targets, and perhaps to draw attention to the risks that may endanger achieving those targets.
The document – Fiscal Outlook of the Czech Republic has the following structure:
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The first partbrings together the basic points of departure, the macroeconomic framework and main fiscal policy objectives.
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The second partdeals with the current development of public finances.
First, the public budgets’ balances are presented based on the cash flows used in the budgetary process, then the general government balance is presented using the national accounts accrual methodology.
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The third partpresents the medium-term fiscal outlook – the budgetary outlook as an operating tool for executing fiscal policy and the subsequently derived outlook for the entire general government sector, accompanied by the long-term projection.
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A substantial partof the publication should be the chapter focusing on a selected topic and containing analyses of current problems of public finances and presenting results of the Ministry of Finance’s analytical and research activities. This part should satisfy the more demanding readers with expert contributions to the discussion of public finances and fiscal policy. The first topic is devoted to the description and evaluation of fiscal rules used in the Czech Republic and within the European Union.
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The final partcontains an annex of tables.
To a certain extent, this first edition is atypical due to its numerous explanatory notes and boxes. We believe that these can help readers to orientate better in the large amount of data about public finances and to facilitate understanding of the information provided.
The Fiscal Outlook will be published every six months,following the compilation of a new medium-term state budget outlook (April and September) and after publishing the statistical data for the general government sector (April and October). We believe the new publication will attract both professionals and the nonspecialist public.
Any comments or suggestions that would help us to improve the quality of the new publication and bring it closer to the needs of its users are welcomed. Please direct your possible comments towards the following e-mail address: fiskalnivyhled@mfcr.cz.
Commentary to the Fiscal Outlook
- Introduction
- Development of public finances
- Medium-term fiscal outlook
- Topic: Fiscal rules
- Annex of tables – general government in the ESA 95 methodology
Information
Any comments or suggestions that would help us to improve the quality of the new publication and bring it closer to the needs of its users are welcomed. Please direct your possible comments towards the following e-mail address:
Fiscal Outlook is prepared every six months in the Ministry of Finance’s Financial Polices Department. It generally is published in May and October.
Summary data published in tables does not in some cases match sums of individual items to the final decimal place due to rounding..
Data sources:
- Macroeconomic development: Czech Statistical Office, Czech National Bank, Ministry of Labour and Social Affairs, forecast of the Ministry of Finance
- Data concerning general government in the national accounts methodology up to 2006: Czech Statistical Office, Eurostat
- Other data: Ministry of Finance
Deadline for the data sources: April 27, 2007