2006 state budget approved

On Wednesday the Czech government unanimously approved the state budget for 2006 allowing for a 74.4 billion crown deficit. The first version of the budget - discussed in July - proposed revenues and expenditures of some 38 billion crowns less. Some in the banking sector have questioned whether the government will be able to collect as much in taxes next year, saying that further growth in tax revenues - up by 17 percent year-on-year in January to August in 2005 - may be unrealistic in 2006.

The budget deficit should not exceed 4.6 percent of the GDP if the Czech Republic is to meet conditions under the EU convergence programme paving the way for the country to eventually adopt the euro, the monetary unit of the European Union.

The budget must still be approved by Parliament.