UPDATE 1-Czech budget gap widens far beyond full-year plan

                                
* Five-mth budget gap widens to nearly twice full-yr target
                                
 * Analysts see full-year deficit near 200 billion crowns
                                
 * Govt struggles with 2010 budget plan
                                
 * Table [ID:nPRA002589], Instant view [ID:nL133620]
                                
 
                                
 (Adds finmin comments on 2009 and 2010 outlook)
                                
 PRAGUE, June 1 (Reuters) - The Czech budget deficit jumped
to nearly double the original full-year plan in the first five
months of this year as the economic crisis hit revenues.
                                
 The Finance Ministry said on Monday the central government
budget gap swelled to 71.4 billion crowns ($3.79 billion) for
the first five months of 2009, far above the planned full-year
deficit of 38.1 billion.
                                
 Overall revenues dropped by 3 percent from the same period
last year to 400 billion crowns, while expenditure rose 4.6
percent, the Ministry said.
                                
 Czech gross domestic product fell 3.4 percent in the first
quarter, reducing all types of tax payments. The budget was
drafted last summer when the ministry forecast 4.8 percent
economic growth this year.
                                
 The budget gap for the five months equals about 1.9 percent
of estimated full-year gross domestic product. It excludes local
government budgets and various funds that together make up the
national fiscal system.
 The Finance Ministry has said it expects the full-year
overall fiscal gap at 4.5 percent of GDP and the central
government budget deficit to reach 150 billion crowns.
                                
 But that will require savings, and analysts see an even
bigger shortfall.
                                
 "The budget deficit may head to 200 billion crowns by the
end of the year," said David Marek, chief economist at Patria
Finance.
                                
 "Keeping it below this milestone would be difficult and
would need expenditure cuts by the current government. It is
difficult because it would be desirable to provide positive
fiscal stimulus for the economy but there is no scope for
further stimulus."
                                
 But Finance Minister Eduard Janota said after the May
figures that a 150 billion full-year gap was still realistic.
                                
 The government has more than doubled its gross borrowing
target to 280 billion crowns this year.
                                
 The ministers discussed the 2010 budget plan on Monday but
interrupted the discussion due to demands by the Transport
Ministry for an extra 50 billion crowns for road construction.
                                
 Janota told a news conference he rejected the plan unless it
was accompanied by savings in order to stick to the government's
limit of 170 billion crowns central state budget deficit.
                                
 The Finance Ministry has proposed a 165 billion crown gap
for next year, which would require a wage freeze and 5-20
percent cuts in discretionary spending.
                                
 The budget will be completed by a new parliament after an
election in October and the leftist Social Democrats, who have
strong chances of forming the next cabinet, have spoken against
strict spending cuts.
  (Reporting by Jan Lopatka and Jana Mlcochova; editing by
Stephen Nisbet)