Czech Foreign Debt Drops In June

The Czech Republic’s foreign debt fell to 4.184 trillion crowns at the end of June this year. It decreased by 92.7 billion quarter-on-quarter and by 189.3 billion year-on-year. The current amount of foreign debt represents 71 percent of the country’s gross domestic product (GDP), ie the total output of the Czech economy. This follows from data published today by the Czech National Bank (CNB).

The Czech Republic’s external debt has been declining steadily since the second quarter of 2020. According to the CNB, developments in the second quarter of this year were mainly determined by a decline in indebtedness in other sectors other than the government and banking sectors.

However, the private sector still accounts for the vast majority of the country’s external debt, about three quarters. The remaining part consists of public sector liabilities, which include, in addition to government debts, also liabilities of private entities guaranteed by the government and debts of companies with a majority state participation.

The general government and banking sectors also recorded a decline in indebtedness in the second quarter. At the end of June, the share of the government sector itself in the Czech Republic’s total foreign debt was 18.6 percent and the share of the banking sector was 37.9 percent.

In the structure of external debt by instrument, the most common forms of debt financing are deposits and bonds, which account for 48.1 percent of total debt. Liabilities with an original maturity of more than one year represent 46.5 percent of debts.