PRAGUE: The Czech 2015 state budget draft will bring limited fiscal easing that will not bring any danger because the government has room to support growth without threatening the sustainability of public sector finances, rating agency Moody's said on Tuesday.
The government has approved a central state budget draft with a deficit planned at 100 billion crowns ($4.59 billion), below this year' plan of 112 billion but above the expected final result of around 80-90 billion.
The overall public sector deficit is seen at around 2.6 percent of gross domestic product next year, including a one-off charge related to the lease of fighter aircraft.
"Although the new budget does call for fiscal easing, deficit targets are lower than expected and fiscal consolidation is likely to be back in 2016," Moody's analysts said in a report.
"We believe that this signals a continued commitment by the authorities to fiscal prudence that has been a staple of the Czech sovereign's credit profile and underpins its solid fiscal policy credibility, while also giving the population a respite from the austerity measures that led the sustained consolidation effort since the global financial crisis."
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