* Czech PM makes first estimate for 2010 fiscal deficit
* 2010 gap seen close to 5 pct/GDP, similar to this year's
* No higher risk premium seen yet
(adds analyst, govt debt detail)
By Jana Mlcochova
PRAGUE, May 11 (Reuters) - The Czech Republic's public sector deficit in 2010 could be close to 5 percent of gross domestic product, far above euro zone adoption threshold, Prime Minister Jan Fischer said on Monday.
The Finance Ministry did not provide an official forecast for the 2010 deficit in its latest prognosis released on April 29, so Fischer's estimate is the first such forecast.
"Yes, it would be close to 5 percent according to the ESA methodology," Fischer told Reuters via telephone on his first day in office.
"The deficit (will be) similar to this year's quantitatively."
The Finance Ministry official forecast expects this year's total fiscal gap at 4.5 percent of GDP but former Finance Minister Miroslav Kalousek had estimated on April 20 the shortfall could hit 5 percent.
The public sector deficit was only 1.5 percent of GDP in 2008, comfortably within the criteria stipulating the fiscal gap in a euro candidate country must not exceed 3 percent of its total output.
A protracted economic crisis is taking its toll on revenues in the state coffers while measures to combat the crisis along with rising welfare costs bloat government expenditures.
RISK PREMIUM
Finance Minister Eduard Janota has said he wants next year's central state budget gap below 150 billion crowns ($7.32 billion). The central state budget is the main part of the public sector balance which also includes regional budgets, health insurance and various state funds.
"It is a compromise between saving and supporting the economy," said David Marek, a chief economist at Patria Finance, adding that without spending cuts in the budget, the public sector deficit would exceed 5 percent.
Janota had said in the absence of savings measures, the gap would jump to 6.7 percent.
"A 5 percent deficit is something that financial markets can still accept without an overly high risk premium that the state would have to pay on government bonds and that could have a negative impact on the Czech crown or equities," Marek said. He added spending cuts must be implemented to avoid a threat of a rising risk premium.
The government has stepped up its borrowing but yields have risen amid risk aversion surrounding the central European region and a deteriorating outlook for the economy which is seen contracting by 2.3 percent this year.
The Czechs sold 4.7 percent coupon bonds due 2022 in April at an average yield of 6.130 percent, up from 5.329 percent at an auction in June 2008 when interest rates were 200 basis points higher.
The country has already borrowed 90 billion crowns on domestic markets this year and plan to raise a similar amount by the end of the year, far exceeding the upper boarder of its planned domestic debt issuance for this year which assumed a maximum of 125 billion crowns in domestic bond.
The debt financing plan released in January expects foreign currency debt at maximum 74 billion crowns. More than a half of that was covered by a 1.5 billion 2014 euro bond on April 29. (Reporting by Jana Mlcochova; Editing by Mike Peacock and Andy Bruce)