Czech Republic - Parliament adopts 2021 budget revision through emergency procedure

ANO, CSSD and KSCM support budget, as Communists decided to stay with government in the end

Since it was an emergency procedure, budget revision bill now only needs President Zeman's signature

Finance ministry now plans general govt deficit at 7.6% of GDP in 2021, while general govt debt - at 45% of GDP

There is no clarity on financing changes, as no breakdown was provided; more details may come with next state debt report on Apr 16

Revision mostly accommodates tax cuts adopted in late 2020, tax revenue projection revised massively downwards

Government commits to keep current expenses stable, except for pandemic support, which we expect to increase

We see revision as inevitable, but it won't reduce risk of a worsening debt outloo