Official: Gov’t could amend deficit, growth plans for the better

Telco

The economy ministry expects this yearʼs macroeconomic performance to be better than the official projections, and the government could amend its official deficit target and the growth projection, state secretary Péter Benő Bánai said, according to Hungarian news agency MTI.

Bánai spoke to journalists after the ministry published its detailed report of the first two months of the year, confirming the deficit at 35.4% of the annual target.

The official amendment of the current 2.4%-of-GDP target for this yearʼs general government deficit could happen at the end of April at the earliest, after the countryʼs updated convergence program is sent to Brussels and the budget bill is submitted to Parliament, Bánai said.

Interest expenditure could be net HUF 30-40 bln less than targeted even by a conservative estimate, the state secretary said. Government securities yields are already lower than foreseen, he said.

The 2015 budget targets interest expenditures of HUF 1.112 trillion and interest revenue of HUF 82.6 bln.

The 2015 growth projection is likely to be upped, Bánai said, referring to the economy minister who spoke about 2.5%-3% growth for 2015.

The 2014-end state debt is expected to be below the 77.3%-of-GDP ratio recorded at the end of 2013. Similarly, the 2014 deficit will be below the 2.9%-of-GDP government target but will be over the 2.2% first reading of the National Bank of Hungary, Bánai said.

Bánai said the government "will not get extra marks" from credit rating agencies for bringing forward the submission of the budget bill.

Prime Minister Viktor Orbán announced last week and the economy ministry confirmed this week that next yearʼs budget bill will be submitted to Parliament by the end of April, well before the mid-October deadline, and MPs could vote on the bill by the end of the spring session, slated to end in the middle of June.

Bánai said they will take into account the planned cut in the bank levy and better than forecast growth when drawing up the bill, he said.

The Hungarian government undertook to cut the bank levy from 2016 as part of a memorandum of understanding it signed with the European Bank for Reconstruction and Development (EBRD) in early February. The cut would be HUF 60 bln in 2016 compared the HUF 144 bln central budget revenue it is planned to generate this year.

 

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