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Lower growth, weaker forint put HUF 320bn dent in 2012 budget – Matolcsy

Telco

The government is recalculating the 2012 budget assuming an exchange rate of 299 forints to the euro and GDP growth of 0.5%, which will have a combined HUF 320bn effect, National Economy Minister Gyorgy Matolcsy said at a press conference on Thursday.

The assumptions compare to a HUF/€rate of 268 and GDP growth of 1.5% in the budget bill originally submitted to Parliament by the government.

Mr Matolcsy said the government had decided on measures that would make the 2.5%-of-GDP deficit target achievable.

Prime Minister Viktor Orban said at the weekend that the 2012 budget bill would have to be recalculated because of lower growth and a weaker forint.

The government will cover the HUF 320bn by using up the HUF 200bn in "national protection" reserves, while a further HUF 120bn will come from contributions for Hungarians who remain in private pension funds, HUF 20bn will come from a higher excise tax on tobacco products and HUF 52bn will come from reserves freed up in budget chapters, Mr Matolcsy said.

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