Audit office: 2014 deficit target can be met

MNB

The Hungarian Audit Office (ÁSz) today released an opinion which reckons that the central government’s 2014 deficit target can be met if the economy grows by a rate of at least 2%. 

ÁSz Deputy Director Tihamer Warvasovszky explained to local media that “Lower-than-expected inflation or slightly higher-than-seen deficit or debt at local councils or other budgetary institutions may cause infringement of the budget regulations,” however. 

Declining tax revenue could also deter the government’s goal to reduce public debt 0.5% to 76.9% of GDP in 2014, according to the ÁSz report. Meanwhile, the International Monetary Fund’s Fiscal Monitor released this week forecasts an *increase* to 80% for Hungary’s national public debt in 2014.

The budget bill targets a deficit of 2.9% of GDP for 2014, just under the European Union-mandated threshold of 3%. The government is planning for GDP growth of around 2% and annual inflation of 2.4%.

Warvasovszky also noted that some HUF 220 million is slated as budget reserves, including HUF 100 billion within the “Country Protection Fund”; such reserves were HUF 400 billion for 2013.

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