October 13, 2019 / 10:11 AM / 2 months ago

Czech PM: government would help economy in case of downturn-paper

FILE PHOTO: Czech Republic's Prime Minister Andrej Babis addresses the 74th session of the United Nations General Assembly at U.N. headquarters in New York City, New York, U.S., September 25, 2019. REUTERS/Eduardo Munoz

PRAGUE (Reuters) - The Czech government would step in to help the economy in case of a downturn, although an economic crisis is unlikely, Prime Minister Andrej Babis told a local newspaper.

The Czech economy is expected to slow next year, but it is still outpacing its European Union peers as rising domestic consumption offsets weaker exports hit by trade tensions between the United States and the EU or China.

Babis said that there would be no “crisis”.

“Should the economy cool down, we would use investments to replace consumption and exports which have driven our growth,” he told the weekend edition of Pravo newspaper.

“We will keep pumping money into the economy to support growth,” he said.

The finance ministry forecasts gross domestic product (GDP) easing to 2.2% in 2020 from an expected 2.4% this year.

Finance Minister Alena Schillerova told Reuters on Friday that there was no need to paint “bleak scenarios”, but in case of a budget revenue shortfall, she would prefer making savings over raising the deficit, planned at 40 billion crowns ($1.71 billion) or 0.7% of GDP next year.

Babis said that there would be no cuts to state workers’ salaries or pensions, which were raised by his government.

“Even if GDP growth slowed, we would never take money away from the people. We will never do that,” he said.

Reporting by Robert Muller, editing by Deepa Babington

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