Hungary’s 2010 general government deficit may have reached 4.1-4.2% of GDP, over the 3.8% target, because of gaps in local council budgets, state secretary for the Prime Minister’s Office Mihály Varga said at an event organized by national business association MGYOSZ on Thursday.
Local councils’ 0.9%-of-GDP deficit will add to the 3.3% central government deficit, bringing the final combined accrual-based figure to 4.1-4.2%, Varga said.
Varga said the government plans to establish a state institution that will lend to local councils through the Government Debt Management Center (AKK) with the aim of making credit cheaper for local councils while making the budget more transparent. The practice of local councils covering their operating costs with bond issues must end, he added.
Varga said, the government will implement the structural reforms in the Szell Kalman Plan “100%”.
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