Czech Fiscal Policy: Introductory Analysis

Vladimir Bezdek (), Kamil Dybczak and Ales Krejdl

Working Papers from Czech National Bank, Research and Statistics Department

Abstract: What is the size of quasi-fiscal operations and their impact on the overall fiscal balance and public debt in the Czech Republic? Is the recent increase in Czech fiscal deficits fully attributable to the business cycle, or are there non-cyclical factors in place? And last but not least, what are the long-term perspectives of the fiscal system given the size and speed of the expected population ageing process? These are the issues dealt with in the paper. Our results, although being surrounded by some margin of uncertainty, are quite cautionary. The transparency of the fiscal accounts seems to be insufficient and the size of off-budget operations is not negligible. Moreover, we have been witnessing a rapid increase in the cyclically-adjusted deficits, and Czech fiscal policy exhibits mainly pro-cyclical features. Looking into the more distant future reveals that our current fiscal system is extremely vulnerable to demographic pressures, even by international comparison. We argue that the fiscal authorities should increase the overall transparency of the fiscal accounts, mitigate the pro-cyclical characteristics of fiscal policy and make the whole fiscal system more resistant to the expected demographic pressures.

Keywords: ageing populations; cyclically-adjusted balance; fiscal policy; fiscal stance; offbudget transactions; quasi-fiscal policy. (search for similar items in EconPapers)
JEL-codes: E62 H11 H5 H6 H81 (search for similar items in EconPapers)
Date: 2003-11
New Economics Papers: this item is included in nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2003/07

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