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Gov't to reduce subsidies for medicines, public transport to meet deficit target

Initiatives

The government has decided to take several measures necessary to meet Hungary's deficit targets for this year and 2013, including reducing state subsidies for medications this year and cutting central funds for Budapest's troubled public transport company BKV next year, according to a government decree published in the Hungarian Gazette on Tuesday.

Under the decree, the national resources and economy ministries must present a proposal to reduce drug subsidies by February 29. The decree also mandates the ministries to submit a proposal by the middle of March on further drug subsidy savings measures for next year in addition to those outlined in the Széll Kálmán Plan, a structural reform program announced last spring.

The development, the interior and the economy portfolios have been given eight days to complete a proposal targeting reduced funding for BKV in 2013 compared to this year's central budget allocation.

The national development minister and the national economy minister must submit a proposal on the introduction of an electronic toll system by July 1, 2013 at the latest.

The decree also prohibits purchases of furniture, passenger cars, IT equipment or telephones by government institutions.

The government's general government deficit target is 2.5% of GDP for 2012. It aims to keep the gap under 3% in 2013.

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