Government plans 2014 budget with 2.9% deficit

History

Hungary’s government assumed a deficit of 2.9% of national GDP when drafting the 2014 budget, Economy Minister Mihály Varga, telling commercial news channel ATV the government was calculating with 2.4% average annual inflation in 2014.

The government put the 2014 deficit at 2.7% of gross domestic product and projected average annual inflation of 3.2% in the country’s updated convergence program submitted to Brussels in April. Varga said the ministry had not calculated revenue from a tax on advertisements when drafting the 2014 budget, adding that the deficit could be kept under the 3% European Union threshold even without it.

Varga said that the government must draft a budget for next year that ensures Hungary is not placed under another excessive deficit procedure. Speaking about this year’s budget, he said there were risks on both the revenue and expenditure sides related to disputes over accounting. He cited one such dispute related to a capital raise in the state-owned Hungarian Electricity Works (MVM) related to the purchase of the local gas business of German utilities company E.ON.

– Written by Gábor Pákozdi

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