Significant Drop in Borrowing Needs: Czech Republic's Financing Outlook for 2023
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Elsewhere on the supply side for this year, we no longer expect any euro-denominated bond issuance, as we assumed in our CZGBs outlook at the beginning of the year. The MinFin is currently in discussions with the European Commission to extend the Recovery and Resilience Facility plan and we expect this year's FX needs to be covered fully by European Union money. On the other hand, we do not expect EU money to be involved in covering CZK needs this year.
Financing needs for 2023 (CZKbn)
Significant drop in borrowing needs next year
The MinFin recently published an updated funding strategy that didn't bring much new for this year. However, the figures for next year confirmed our earlier calculations of a drop in borrowing needs next year to around 60% of this year's level. This is due to the year-on-year decline in the state budget deficit, but also to low redemptions next year. This should translate into a significant drop in the supply of CZGBs next year. Moreover, the government may involve more money from the EU and supranational institutions, which may further reduce the supply of CZGBs next year.
Total financing needs and CZGBs issuance (CZKbn)
