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Difference between target and actual deficit minimal

Hungarian Finance Minister Péter Oszkó said the difference between the target and the preliminary general government deficit is minimal, and the outcome will be affected by final local-council figures. Preliminary KSH figures released in the morning show that the 2009 ESA95 deficit ratio exceeded the target by 0.1 percentage points.

Hungary ran a preliminary ESA95 general government deficit of HUF 1,035 billion or 4.0% of GDP in 2009, the Central Statistical Office (KSH) said on Thursday morning. The preliminary deficit exceeded the 2008 shortfall by HUF 30 billion, or 0.2 percentage points.

Oszkó said the KSH figures show that the government was operating in “savings mode”, as the primary surplus came to 0.7% of GDP, higher than the respective 0.5% target. Interest spending, affected by the global economic situation, was more than planned, he said.

The Finance Ministry will receive the final reports of local councils only in late April or early May, and, consequently, the respective figure is still only an estimate, the finance minister said.

Oszkó reminded that preliminary figures in 2008 showed a deficit at local councils, while the final figures showed a surplus. Current estimates show a deficit of over HUF 90 billion, or 0.1 percentage points more than targeted, for local councils, he said.

Hungary's report under the excessive deficit procedure (EDP), sent to Brussels and published by KSH on its website on Thursday, shows 2009 general government net borrowing or deficit of HUF 1,056 billion, slightly above the ESA95 figure but also equal to 4.0% of GDP. Local councils had a deficit of HUF 109.2 billion last year according to the EDP report.

The ESA95 and EDP deficits are both accruals based but differ in the accounting of swap transactions. (MTI – Econews)