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Deficit target achievable, say analysts

Hungary can still achieve its 3.8%-of-GDP accrual-based general government deficit target for 2010 in spite of the cash flow-based gap reaching 131% of the full-year target in October, analysts told MTI on Monday.

Hungary's general government, excluding local councils, had a cash flow-based deficit of HUF 43.6 billion in October, bringing the January-October gap to HUF 1,132.7 billion or 131.1% of the full-year target, the National Economy Ministry said late on Monday.

K&H Bank chief analyst György Barcza said the more than HUF 300 billion in extra budget revenue expected in December would be more than enough to meet the cash flow-based deficit target of HUF 870 billion. Local councils are expected to add 0.7 percentage point of GDP to the cash flow-based deficit, well over the earlier expected 0.4 percentage point, but even this should not put the accrual-based deficit target at risk, he added.

Gergely Suppán of Takarékbank said the HUF 300 billion in extra budget revenue in November and December could cause the cash flow-based deficit to narrow as far as HUF 826 billion, well under the target. He noted that a surplus had been expected in October, but the government probably made big transfers to hospitals, state-owned railway company MÁV and the Budapest Public Transport Company (BKV).

The ministry said on Monday it expects close to HUF 90 billion in revenue from the bank levy in December. It projects some HUF 160 billion in revenue from recently introduced crisis taxes on the energy, telecommunications and retail sectors to be booked in the same month. Together with the HUF 60 billion in payments from mandatory private pension fund members in November and December, the 3.8% accrual-based general government deficit target for 2010 can be achieved, the ministry said. (MTI Econews)