Hungarian quarterly current-account deficit narrows on services

The deficit was €1.13 billion ($1.49 billion), compared with a revised €1.48 billion in the Q2, the Budapest-based central bank said today. The shortfall compares with €1.84 billion in the year-ago period. Hungary has pledged to cut the current account deficit to 5.9% of gross domestic product next year from an estimated 7.9% this year, under plans backed by the European Union. By the end of the government's term in 2010, Prime Minister Ferenc Gyurcsány wants to cut the gap to about 3% of GDP. Hungary's current account shortfall was 7.9% of gross domestic product last year, compared with 0.3% in the dozen countries using the euro. The Q2 balance improved as the trade deficit, its main component, narrowed. The trade deficit was driven by rising exports. Hungary's deficit on goods traded widened to €291 million from a revised €50 million, as exports fell to €14.1 billion from €14.4 billion and imports were unchanged at €14.4 billion. The deficit on services and income shrank to €915 million from €1.41 billion in the Q3. (Bloomberg)