Czech c.bank ups fiscal gap forecasts for 2006-07

PRAGUE, Nov 3 (Reuters) - The Czech central bank has raised its forecasts for public finance deficits for this year and next after an upward revision to 2005 fiscal data, the bank said in a quarterly update of its Inflation Report.

The bank increased the estimate for the 2006 shortfall under the ESA 95 standard to 3.5 percent of gross domestic product (GDP) from a previous 2.4 percent, and boosted the outlook for the 2007 gap to 4.0 percent from a previous 3.0 percent of GDP.

"The estimate of the fiscal impulse, which approximates the impact that fiscal policy has on economic growth, does not change because of this revision. Still, there is a modest rise in the impluse, mainly due to lower than expected tax collection," said the Inflation Report.

Last month, the 2005 public finance gap was officially revised to 3.6 percent of GDP from an earlier 2.6 percent. ((Reporting by Marek Petrus; Editing by Alan Crosby; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

Keywords: ECONOMY CZECH BUDGETS