Budget deficit for 2013 now HUF 1.05 trillion
Draft legislation submitted by National Economy Minister Mihály Varga showed that the Hungarian federal deficit for 2013 will be HUF 1.05 trillion; some HUF 171 billion more than expected is accounted for in the bill.
The legislation attributes the further amount requested, equivalent to approximately 0.8% of GDP, mainly to the purchase of Germany-based E.On in addition to “the planned capital injection into savings banks, a rise in teachers' salaries, higher spending on human services and other items.”
In a statement, the Fiscal Council of Hungary, a panel of economists including National Bank of Hungary (MNB) governor György Matolcsy, warned of “rising risks” in the sitting government's budget plans, though it considered the “deficit target achievable.” The Council cited higher spending and the recent drop in international reserves as reasons for the increased deficit.
EU requirements state the deficit must be under 3% of GDP, while Prime Minister Viktor Orbán has announced his government’s goal of a 2.7% mark. Varga assured local media that the submitted amendments “would not affect budget targets set under European Union norms.”
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