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Varga anticipates lower deficit than originally expected

Interview

According to the expectations of Economy Minister Mihály Varga, this year's budget deficit could be lower than previously expected, at 2.6-2.7% of GDP, Hungarian daily Magyar Hírlap reported on Saturday.

Economic growth has been higher than expected this year and that boosted the revenues of the central budget, allowing the central budget to close with a surplus at the end of this year, Varga said, like it did in September, October and November. The economy minister however added that several factors influence the final deficit figure – including the way ministries and budget financed institutions close their finances for the year.

On the query of the paper, the minister confirmed that there are no plans to issue foreign currency bonds next year, but “a dogmatic approach” should be avoided.

"If the situation in financial markets is favorable and it is worthwhile for Hungary to replace long-term, high-interest securities with the involvement of a foreign currency bond issue, then we will do it," the minister said.

In connection with the bank tax, Varga said that "the government is ready to develop a system in which the current burdens are reduced in exchange for lending." Answering the daily’s question of whether a new agreement is planned between the government and banks, the minister said "It is time to think about a new framework and start the preparation of new agreements."

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