Czech government approves belt-tightening budget for 2011

The centre-right Czech government has approved a draft budget for next year that limits the public finance deficit to 4.6 percent of gross domestic product. This year the country’s public deficit is expected to rise to 5.3 percent of GDP. The planned deficit for 2011 is CZK 135 billion, down from this year’s ceiling of CZK 163 billion, which is the highest ever. The budget is due to be passed in the lower house in early December.

The government of Prime Minister Petr Nečas has announced a raft of cost-cutting measures, along with reform of the pension, health care and tertiary education systems. The cabinet has pledged to balance the budget by 2016.