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The lower house passes the draft state budget for 2012 in a first reading; the 2011 Czech state budget deficit falls to 91.5 billion crowns in October; the Czech unemployment rate drops 0.5 percent to 6.6 percent year on year; the lower house approves restrictions of state support to building savings; and Škoda Auto reveals price of its new model.

Draft state budget passed by MPs in first reading to be revised in January

Photo: CTK
The lower house this week passed the draft state budget for 2012 in a first reading. The budget plan, submitted by the centre-right coalition reckons with revenues of 1,085 billion crowns, expenditures of 1,190 billion and a 105-billion-crown deficit, or 3.2 percent of GDP. Compared with 2011, the budget gap is to drop by 30 billion. A final vote in the lower house is to take place in December. Meanwhile, earlier this week the government said it would revise the state budget in January when a more accurate growth forecast is available. The Finance Ministry has revised downward its growth prediction for 2012, from an estimated 2.5 percent to 1 percent at best. The lower growth would cause the expected revenues to drop by a further 17 to 18 billion crowns, Finance Minister Miroslav Kalousek said.

2011 State budget deficit falls to 91.5 billion crowns in October

Foto: Štěpánka Budková
Meanwhile the 2011 Czech state budget deficit fell to 91.5 billion crowns at the end of October from 105.1 billion in September according to figures released by the Finance Ministry this week. In October 2010 the state budget deficit stood at 96.7 billion crowns. The Finance Ministry says the 135-billion-crown state budget deficit proposed for 2011 will be maintained and an expected 20-billion-crown drop in tax and social security revenue will be compensated for by savings in government spending.

Unemployment lowest in two years

The Czech unemployment rate in the third quarter of 2011 dropped 0.5 percent to 6.6 percent year on year, according to figures released by the Czech Statistical Office on Friday. The number of jobless people fell to 346,000 – some 28,000 fewer compared to the same period of last year. In a long term perspective this is the lowest unemployment level since the second quarter of 2009. Compared to the second quarter of this year, the number of those without a job dropped by 15,000. People with only primary education remain the most vulnerable.

Lower house finally approves restrictions of state support to building savings

The lower house overrode a Senate veto and approved restrictions of state support to building savings on Friday. The maximum level of state support to individual accounts will be reduced to 2,000 crowns per year. The legislation has yet to be signed by the president. The cuts are expected to save state coffers some 5 to 6 billion crowns a year. According to Finance Minister Miroslav Kalousek the amendment also aims to remove inequality on the financial market regarding exclusive state support to building savings.

Škoda Auto reveals price of new model

Škoda Citigo, photo: CTK
The Škoda Auto Company has finally revealed the price of its latest model – the Škoda Citigo – intended for city traffic. The basic three-door Citigo Active will be sold for 179,000 crowns (some 10,000 USD), the upgraded Ambiente and Elegance versions will be available for 194,000 crowns and 209,000 crowns, respectively. Škoda will launch the sales of its ‘New Small Family’ as it calls the new range, in late November in the Czech Republic and in the summer of next year in other European countries. The Citigo is produced in neighbouring Slovakia. A five-door version will be available in 2012.