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Hungary sees state debt falling to 76.9% level this year

MNB

The National Economy Ministry projects Hungary's state debt as a percentage of GDP will fall to a lower-than-expected 76.9% at year-end, down from 77.3% at the end of last year. The ministry announced the projection on Wednesday, after the Central Statistics Office (KSH) sent a scheduled Excessive Deficit Procedure report to the European Commission.

The year-end debt level noted by the ministry is well under the 79.4% rate in the latest release from the National Bank of Hungary; however, the central bank's data do not reflect a GDP revision, explaining the discrepancy. The ministry said in its statement that the adoption of the newest European System of Accounts (ESA2010) raised Hungary's GDP last year by HUF 768 bln or 2.6% over that using the old ESA95 methodology.

The ministry confirmed the government's 2.9%-of-GDP general government deficit target for this year. The revision also resulted in a GDP increase for last year: 1.5% GDP growth in 2013 instead of the 1.1% growth reported by KSH earlier, the ministry said. GDP growth is expected to reach 3.1% this year, the ministry said. The changeover to ESA2010 raised the 2013 general government deficit to 2.4% of GDP from the earlier figure of 2.2%, the ministry noted, adding that the increase mainly reflected the change in the accounting of swap transactions.

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