The Czech government is working on a plan to save 30 billion crowns ($1.47 billion) to compensate for lower-than-expected economic output this year, Finance Minister Miroslav Kalousek said on Sunday. The central European country's 2012 budget is based on earlier forecasts of 2.5 percent economic growth but the Finance Ministry now expects stagnation or even a contraction.
"So far we are working with the option of savings of 30 billion crowns," Kalousek said in a television debate.
Kalousek said he would propose concrete options after a new macroeconomic forecast is ready at the end of January.
The budget plan sees a 105 billion crown central government deficit this year, down from 142.8 billion last year. The ministry expects the overall public sector deficit, which also includes municipal and regional budgets, national health insurance and various state funds to drop to 3.2 percent of gross domestic product from last year's estimated 3.7 percent.
Kalousek said looking further ahead, the government should discuss changes to automatic indexation of various benefits to ensure a further reduction in the deficit.