EC deficit projections "mistaken", economy minister says

The government believes the European Commission's projections for Hungary's general government deficit in 2013 and 2014 are "mistaken", National Economy Minister Mihály Varga said on Friday. The EC projected Hungary's general government deficit would reach 3.0% of GDP in 2013 and 3.3% in 2014 in its fresh economic forecast published on Friday. In the previous forecast, published in February, it put the gap at 3.4% of GDP in both years. Hungary's government projects a 2.7% of GDP deficit in both 2013 and 2014, well under the 3% European Union threshold. Varga said the government's budgets would continue to keep the deficit under the 3% of GDP European Union threshold. There will be no "election budget" in 2014, he added. Varga noted that it was difficult to project the course the European economy would take in 2014, which speaks against the EC's belief the government will not keep the deficit under the threshold. He said Hungary has a "realistic chance" of keeping the gap under the threshold in 2014, too. He added that the government was prepared to react to economic changes in order to keep the deficit under the threshold, even introducing measures mid-year, if necessary. Varga said Hungary had a "good chance" to exit the Excessive Deficit Procedure against it as early at the end of June, after a meeting of EU economy and finance ministers, and said European Commissioner for Economic and Monetary Affairs Olli Rehn's comments after the forecast was published were "positive". Rehn said Hungary's government could keep the country's deficits under the 3% threshold by introducing additional measures.