Hungary's 2005 ESA95 general government deficit was 6.5% of GDP after adjustment for the pension reform and was 7.8% of GDP without adjustment, the Central Statistics Office (KSH) announced on Tuesday.
The adjusted deficit was revised 0.4 percentage points up from a preliminary figure announced by the Finance Ministry in the spring, and the unadjusted deficit was 0.2 percentage points up from preliminary. The pension-reform-adjusted general government deficit was revised up by close to Ft 100 billion to Ft 1,434 billion. Gross budget debt, calculated in conform to the Maastricht criteria, was Ft 12,714.2 billion at the end of 2005, or 57.7% of GDP after adjustment for the pension reform, the KSH report said citing calculations by the National Bank of Hungary. The figure was revised up by Ft 2 billion from the preliminary figure. Unadjusted budget debt was 61.6% of GDP. The Finance Ministry forecasts this year's general government deficit at 8.6% of GDP after adjustment and 10.1% before adjustment for the effects of the pension reform. The debt forecast for 2006 is 63.6% and 68.4%, respectively. Hungary's 6.5%-of-GDP deficit ratio was the largest among the 25 EU members in 2005, while its debt ratio was below the EU25 average of 63.2%, Eurostat general government statistics published on Tuesday show.
The debt of nine EU members surpassed the 60% Maastricht limit at the end of last year. In 2005 the government deficit of both the euro area and the EU25 fell compared to 2004, while the government debt increased. In the euro area the government deficit decreased from 2.8% of GDP in 2004 to 2.4% in 2005, and in the EU25 it fell from 2.7% to 2.3%. In the euro area the government debt to GDP ratio rose from 69.8% in 2004 to 70.8% in 2005, and in the EU25 rose from 62.4% to 63.2%. Eurostat noted that Denmark, Hungary, Poland and Sweden are at present benefiting from a transitional period of implementation of Eurostat's decision on classification of funded pension schemes, which has the effect of temporarily improving their deficit/surplus. From April 2007 the derogation will come to an end, however, and the defined contribution funded pension scheme in these four countries will have to be classified outside the government sector. Hungary has started using the unadjusted figures for better comparison since this summer. (Mti-Eco)