2013 budget viable, but IMF deal needed, says Fiscal Council head
Monday, August 6, 2012, 1:40 PM CET
Next year's budget in its current form can be financed and the public debt will not grow beyond the limit stipulated by law if the international economic climate does not worsen, Árpád Kovács, head of the Fiscal Council, told daily Népszabadság on Sunday.
The paper quoted Kovács online as warning, however, that external funds to finance the budget should be involved in the cheapest possible way, and called Hungary's planned deal with the International Monetary Fund and the European Union on financial assistance "the right way".
The Fiscal Council's concerns are primarily on the revenue side of next year's budget, Kovács told nol.hu. He said that the government's plans for new taxes have elicited tension, and that it was not clear how the government would finance its employment protection programme.
Kovács said the government's objective to reinforce the middle classes was important, but added that the distribution of the public burden should be reconsidered. He also raised the idea of introducing a "solidarity contribution" on top of the current flat tax.
Kovács warned that though the economy may not shrink next year, GDP growth could be well below the 1.6% outlined in the budget.