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MNB forecasts deficit undershoot in 2019

The National Bank of Hungary (MNB) projects the general government deficit, calculated according to European Union accounting rules, will reach 1.6-1.7% of GDP this year, slightly under the government’s official target of 1.8% of GDP, the central bankʼs official page mnb.hu reports.

Budget revenue is likely to be over the target by the equivalent of 0.7% of GDP this year, the central bank said in a mid-year assessment of budget trends.

On the expenditure side, MNB noted spending equivalent to 0.3% of GDP on family policy measures rolled out in February that are not contained in the 2019 budget act.

Inflation and GDP growth are likely to be higher than assumed in the budget act, which will result in higher pension expenditures because of an inflation-linked pension top-up and a pension premium linked to GDP growth, the MNB added.