The nominal debt of government institutions in the Czech Republic rose by 630.3 billion to 2.5191 trillion crowns year-on-year in the first quarter of this year. The general government debt ratio rose from 32.4 percent to 44.1 percent of GDP year on year, according to data released today by the Czech Statistical Office. Compared to the last quarter of last year, the Czech government’s debt increased by CZK 366.1 billion and the debt ratio by 6.3 percentage points.
This year, the Ministry of Finance will need 740.7 billion crowns to finance the state debt. This is 12.3 billion crowns more than the Office originally planned in the April Strategy for Financing and Management of the State Debt for 2021. The Ministry announced this today in the Quarterly Report on the Management of the State Debt.
The slight increase is mainly due to the launch of exchange operations, in which the Ministry repurchases medium- and long-term government bonds due in 2022. “said the Ministry of Finance.
The April strategy already included an amendment to the state budget law for 2021, increasing the state budget deficit from 320 billion crowns to 500 billion crowns.
During the first half of the year, the Ministry of Finance already covered 409 billion crowns, almost 60 percent, with the issuance and sale of government bonds. It will continue its issuing activities in such a way as to ensure that its actual amount is covered.
The total planned scope of the nominal value of the gross issue of koruna medium-term and long-term government bonds on the domestic market in 2021 fell by CZK 80 billion compared to the quarterly report to a minimum value of CZK 500 billion, the Ministry of Finance stated. The reason was the higher involvement of money market instruments in covering this year’s financing needs than in previous years.
However, the actual value of issuing activity will depend mainly on the management of the state budget during the second half of this year, as well as the situation on the domestic and foreign financial markets, the Ministry of Finance stated. The stated minimum value of the issue of koruna medium-term and long-term government bonds does not include sales of government bonds as part of exchange operations, where the Ministry repurchases government bonds due in 2022, the Ministry of Finance added.
The Ministry plans to reopen already issued issues of koruna medium-term and long-term government bonds on the primary market with maturity from 2023, depending on the interest and demand of dealers. Furthermore, the Ministry of Finance plans to issue a new fixed-rate koruna issue with a maturity of 2028 with the aim of achieving a ‘smoothed-out maturity profile’ of government debt in the relevant years.
The nominal debt of government institutions in the Czech Republic rose by 630.3 billion to 2.5191 trillion crowns year-on-year in the first quarter of this year. The general government debt ratio rose from 32.4 percent to 44.1 percent of GDP year on year, according to data released today by the Czech Statistical Office. Compared to the last quarter of last year, the Czech government’s debt increased by CZK 366.1 billion and the debt ratio by 6.3 percentage points.
