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EC changes Hungary deficit projections

Analysis

European Commission experts have modified their projections for Hungary's general government deficit in 2012 and 2013 and now expect the gap to be even further over the government's respective targets, portfolio.hu said on Thursday.

A document portfolio.hu obtained showed the experts modified their projection for the 2012 deficit to 3% of GDP from 2.75% and their projection for the 2013 deficit to 3.6% from 3.25%.

The government targets a deficit of 2.5% of GDP in 2012 and 2.2% in 2013.

European Union officials would not make the document -- used in analysis of fiscal trends in Hungary in the framework of its excessive deficit procedure -- available to MTI immediately when asked.

The document shows the Commission's experts expected the Hungarian economy to contract 0.1% this year, compared to 0.5% growth forecast earlier, Portfolio.hu said.

 

Asked on Friday about the scale of the adjustment necessary for Hungary to meet the Commission's expectations regarding the excessive deficit procedure in light of the new forecasts, Amadeu Altafaj Tardio, the spokesman for European Commission Vice President Olli Rehn, said it was up to the Hungarian government to tell the Commission about sustainable measures it intended to take to meet the targets in the procedure.

 

"We are in a regular and constructive dialogue with the Hungarian authorities in order to see...how this objective can be met, what measures can substantiate the effort in order to meet the target, taking into account the latest...macroeconomic indicators, growth forecasts being a central one," he said.

 

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