Prague - The Czech Republic's centre-right government Monday approved a budget rewrite for 2009 that reflects the expected slump of country's economy, an official said.

Under the revision, the budget deficit could nearly double to 73.3 billion koruny (3.4 billion dollars) this year if the economy slows down to around 1 per cent, an option that Czech Finance Minister Miroslav Kalousek views as the most realistic.

"At this moment I consider the 1-per-cent version ... as closest to reality," Kalousek said at a news conference, adding that he hoped the growth would hover above zero.

The Czech Republic has not been directly hit by the meltdown on the global financial markets but braces for a sharp slowdown of its export-driven economy as demand in its chief market, the eurozone, is on a decline.

Prime Minister Mirek Topolanek's cabinet, which chairs the European Union until June 30, does not favour tossing public money into the economy - and thus increasing state debt - as a tool for avoiding the slump, a policy preferred by other EU states.

The government plans to tap its financial reserves of over 40 billion koruny (1.8 billion dollars) in order to offset an expected drop in budget revenues and squeeze the gap to around a 3-per-cent limit required by the EU for adopting the euro.

Topolanek's government, which had been unenthusiastic about abandoning the Czech koruna before the global financial crisis, now plans to set a date for switching to Europe's common currency in November.

Officials have said that under such schedule the central European country of 10.3 million could enter the eurozone in 2013 at the earliest.

The revised budget outlines a gap of 63.5 billion koruny if the country's gross domestic product grows 2 per cent this year and 54.2 billion koruny if it grows 3 per cent, Kalousek said.

The parliament approved a 2009 budget with a deficit of 38.1 billion koruny, which is based on a projection of a 4.8-per-cent growth that is now widely seen as unrealistic.

Kalousek reiterated that the finance ministry currently estimates this year's growth at 1.4 per cent. The European Commission's latest forecast puts the Czech growth at 1.7 per cent. (dpa)