Czech Republic : Enhancing the Prospects for Growth with Fiscal Stability
This public expenditure review analyzes recent developments in the Czech Republic, and future prospects for growth, with fiscal stability. In analyzing the strategic setting, where a central thrust of this strategy is the accession to the European...
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| Format: | Public Expenditure Review |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2001/04/1096688/czech-republic-enhancing-prospects-growth-fiscal-stability-public-expenditure-review http://hdl.handle.net/10986/15690 |
| Summary: | This public expenditure review analyzes
recent developments in the Czech Republic, and future
prospects for growth, with fiscal stability. In analyzing
the strategic setting, where a central thrust of this
strategy is the accession to the European Union (EU), the
report suggests than an appropriate medium-term target for
fiscal policy, would be to bring down the overall deficit of
the government to one-two percent of GDP, as an intermediate
step towards the EU's stability/growth path objectives,
emphasizing that much of the adjustment should come from the
expenditure side. Given the main purpose of the report - to
take this expenditure adjustment challenge as a mean to
achieve potential efficiency gains, while limiting attending
costs - a reform policy should pursue an ongoing process of
review, revision, and re-definition of the role of
government intervention. Indeed, to succeed, the process of
expenditure reform needs to be firmly grounded in the
development of analytic capacities, linked with
institutional, and procedural enhancement for fiscal
management. The report explores the expenditure reform
opportunities, and cost of bank restructuring, focusing on
relieving The Konsolidacni Banka (KoB) from its status as a
bank, on streamlining recoveries, and asset disposal
methods, and on improving the legal framework for debt
resolution. It reviews the state pension program, suggesting
limited indexation to the consumer price index, elimination
of the actuarially unfair aspects of early retirement
provisions, to increase statutory retirement, while
extending the minimum contribution period for full pension.
To strengthen fiscal management, it is proposed that the
medium-term outlook be expanded into a full-fledged
medium-term fiscal framework, extra-budgetary funds be
consolidated, and, activity/service-based articulation of
the state budget be initiated. |
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