COMMITTEE ON BUDGETARY FORECASTS CONSIDERS FORECAST MADE BY MINISTRY REALISTIC

COMMITTEE ON BUDGETARY FORECASTS CONSIDERS FORECAST MADE BY MINISTRY REALISTIC

At its meeting on Thursday, 29 August 2019, the Committee for Budgetary Forecasts considered the macroeconomic forecast for July (and its August update) and August fiscal forecast issued by the Ministry of Finance of the Czech Republic. The Committee saw both forecasts as realistic in terms of how likely they are to be fulfilled in 2019 and 2020. Four of the eight members of the Committee in attendance, including the chair, voted in favour of the macroeconomic forecast’s evaluation. The vote on the fiscal forecast’s evaluation was unanimous. The remaining two members of the ten-member Committee were excused from the meeting.


“Despite some fairly significant differences of opinion on the development of certain macroeconomic parameters and the likelihood of the risks associated with them, most of the Committee members in attendance agreed that the macroeconomic forecast issued by the Ministry appeared to be internally consistent and matched their expectations in key parameters,” said Chair of the Committee for Budgetary Forecasts Pavel Sobíšek after the meeting.


The Committee justified its statement on the fiscal forecast with budgetary revenues for 2019 and 2020, which, in its view, were realistically predicted by the Ministry of Finance in key areas and corresponded as a whole to the Ministry’s macroeconomic forecast. During the debate, several members nevertheless referred to the risks of failure in achieving the planned revenues, such as the result of possible deterioration in the macroeconomic situation and potential delay in the legislative process, which would affect the discretionary items of the budget. Members of the Committee agreed, however, that the deviations they estimated from the Ministry’s fiscal forecast were not significant enough to prevent evaluating the forecast as realistic.


However, the Committee for Budgetary Forecasts did not simply look at the future at its meeting in August. It also assessed whether the Ministry of Finance’s forecasts and outlook for 2018 had been fulfilled. In its statement, the Committee said that the forecasts and outlook issued by the Ministry of Finance for the year 2018 reflected actual macroeconomic development in the Czech Republic with sufficient precision over a three-year period.