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Hungary says July budget surplus was more than expected

Hungary's government, which is struggling to control the European Union's largest budget deficit compared with the size of the economy, said its surplus last month that was larger than expected. The surplus in July was Ft 33 billion ($157 million) compared with a government forecast of Ft 7.8 billion, the Budapest-based Finance Ministry said in a faxed statement yesterday. This lowered the seven-month shortfall to Ft 1.25 trillion, or 70.9% of the annual target. Prime Minister Ferenc Gyurcsány has been criticized by the EU, the central bank and credit rating companies as the shortfall is expected to surpass targets for a fifth consecutive year. Gyurcsány has pledged to raise taxes, boost energy prices and cut government jobs to trim the shortfall. The government June 20 revised its target for the annual cash-flow budget deficit to Ft 1.77 trillion from Ft 1.55 trillion. The government is expected to revise the annual goal a second time in two months, to 8.6% of gross domestic product by EU standards. The original goal was 4.7%. (Bloomberg)