Czech c.bank cuts public finance gap forecasts

...aid economic growth this year, the CNB's Inflation Report showed on Friday.

The report revealed the bank has lowered this year's fiscal gap forecast to 3.5 percent of GDP from a previous estimate of a 4.0 percent shortfall made in January. The 2008 deficit forecast was cut to 3.4 percent of GDP from 3.9 percent.

The report said the changes reflected a revision of the 2006 deficit to 2.9 percent of GDP, which was below the bank's own earlier estimate of 3.5 percent.

"The estimate of the fiscal impulse in 2006-2008 was kept almost unchanged and characterises the impact of fiscal policy in 2006-2007 as pro-growth, in 2008 as neutral to slightly pro-growth," it said.

[PRAGUE/Reuters/Finance.cz]