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Announced measures not enough to meet 2012 deficit target - Simor

The general government deficit target in the government's 2012 budget draft cannot be achieved based only on measures announced thus far, National Bank of Hungary (MNB) governor András Simor said in a statement posted on the MNB website late Friday.

Simor said he had participated at a meeting of the Fiscal Council on Friday and expressed his opinion.

The meeting of the body approved a resolution concurring with the budget draft but noting significant risks with a vote of 2:1. Simor voted against the resolution.

Simor said in the statement that the budget draft does not calculate with the expected unfavorable macroeconomic effects of an early repayment scheme for forex mortgages at a discounted exchange rate.

MNB experts calculate that the expected fiscal improvements resulting from government measures announced thus far could be, in many cases, smaller than the savings expected by the government, he said. Because of the lack of details about some measures, the effects cannot be estimated, he added.

Considering these factors, the MNB's latest projection puts the general government deficit 1.1 percentage point over the target in the budget draft.