Fiscal Council agrees on necessity of adjustments to 2012 budget

Interview

Hungary’s Fiscal Council unanimously agreed on the necessity of HUF 320bn in adjustments to the 2012 budget bill at an extraordinary meeting to assess the changes on Monday, chairman Zsigmond Jarai said.

The government announced plans to fill the HUF 320bn gap - the result of lower economic growth and a weaker forint - last week.

Mr Jarai noted that a worsening global environment could require further budget measures in 2012, especially considering the fiscal adjustments made now significantly reduce available reserves.

The Fiscal Council sees a realistic chance for the 2012 budget to be approved by Parliament by December 31, he added.

The final vote on the 2012 budget bill is on Parliament’s agenda for late Monday.

Mr Jarai said the Fiscal Council agreed with the decision to leave the 2.5%-of-GDP budget deficit target unchanged in the 2012 budget bill.

The Fiscal Council said a decision to rechannel the 10% employer contribution of private pension fund members to the state pension pillar next year would reduce the predictability of economic policy, raising risks.

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