Page 28 - Central & Southeast Outlook 2020

supported by a low and declining debt burden as well as prudent fiscal policies. Moody’s expects the government debt-to-GDP ratio will continue to fall in the coming years, reaching 30.8% by the end of 2020 and falling below 30% by 2023.
According to the ministry, for 2020 the planned financing needs stand at CZK271.1bn, about 4.6% of GDP, however, the actual value will depend mainly on the state budget performance and on the exchange operations of government bonds in 2019. In the following years, the planned financing needs will fall by CZK8bn in 2021 and by CZK23bn in 2022 due to lower redemptions of medium-term and long-term government bonds denominated in local currency.
In 2022, state debt redemptions denominated in Czech crowns are expected to reach the lowest level in the last ten years. The Czech Republic Debt Management Annual Report for 2019 will be published on February 14, 2020.
The ministry has lately focused on reducing the share of state debt in GDP. At the end of 2019 it forecast the debt to decline by 11.6pp compared to the end of 2013. The final number will depend on the actual state budget performance, financial market operations at the end of 2019 and the size of Czechia’s GDP.
Looking to 2020, the ministry plans to continue reducing the state debt-to-GDP ratio, even though the State Budget Act for 2020 sets out a growth in the absolute value of state debt. However, this will depend on issuance activity that the ministry will adapt to the state budget performance.
In 2020, the ministry plans to issue a number of CZK-denominated medium-term and long-term government bonds on the domestic market with a total minimum nominal value of CZK120.0bn.
The external debt of the Czech Republic corresponded to 79.3% of GDP in 3Q19, according to the central bank’s latest figures.
4.2 ​Debt - Estonia
Successive Estonian governments have followed a balanced budget policy. Financial reserves have accumulated, and the amount of outstanding debt obligations remained relatively low.
In the 2020 budget bill, debt is expected to come in at just 8% of GDP, over 13pp behind the next least indebted country, Bulgaria.
At the end of June 2019, the liquidity reserve was 1.2 times larger than amount of outstanding debt obligations, which consisted of two loans from the European Investment Bank and two Treasury bills, according to the most
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