INSTANT VIEW 1-Czech Jan-Sept budget gap shrinks yr/yr

PRAGUE, Oct 1 (Reuters) - The Czech central state budget showed a 71.4 billion crown ($3.65 billion) deficit at the end of September, narrower than a 105.1 billion deficit a year ago, mainly thanks to higher tax receipts, the Finance Ministry said on Monday.

However, state revenue lagged expectations mainly due to lower value-added tax collection caused by a fall in consumption and lower income from European Union funds.

The parliament approved the full-year 2012 state budget with a planned 105.0 billion crown deficit, down from 142.8 billion in 2011.

The Finance Ministry forecasts the overall public sector gap - including the central budget, regional and local budgets, various public funds and public health insurance - at 3.2 percent of gross domestic product this year.


KEY POINTS: (in CZK bln) 01-09/12 01-08/12 01-09/11

year-to-date balance -71.41 -67.02 -105.14 (For full table, double click on................

DETAILS: - The ministry said the budget showed a 4.4 billion crown deficit in September alone, lower than a 17.9 billion deficit in the same month last year. - January-September revenue rose by 2.1 percent from a year ago to 747.1 billion crowns, lower than expectations for a 7.3 percent rise. Expenditures dipped by 2.2 percent to 828.6 billion. - January-September revenue accounts for 69.6 percent of the annual target. Overall expenditure for the period stands at 69.5 percent of the full-year plan. - Value added tax (VAT) collection rose by 2.3 percent year-on-year although the budget assumes a 15.5 percent rise following a hike in the lower tax rate to 14 percent from 10 percent in January. Overall VAT collection was at 64.7 percent of the annual target. - The ministry said the low annual rise was mainly due to a drop in private sector consumption and one-off legal changes. - It said a significant drop was recorded in consumption of goods and services taxed by the base 20 percent rate that was unchanged. - Income from the European Union was at 53.1 percent of the annual target, and down 1.6 billion crowns year-on-year. - The central state budget is the biggest part of the overall public sector finances which also include local governments, the health insurance system and various state agencies and funds.


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($1 = 19.5872 Czech crowns) (Reporting by Jana Mlcochova)

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