The European Commission sees Hungary’s general government deficit stagnating at 3.4% of GDP in 2009, it said in its latest projection published on Monday.
The Commission said the projection was higher than the government’s official target of 2.9%, because it did not find sufficient details in the new government’s program -- announced on April 19 -- to build additional austerity measures into the prognosis.
If the details support the prognosis and Parliament approves the government’s proposed measures, the deficit could fall 1.25 percentage points under the 3.4% projection, the Commission added.
The state debt-to-GDP ratio is seen rising from 80.8% in 2009 to 82.3% in 2010.
Brussels put the unemployment rate in Hungary at 9.5% for 2009 and 11.2% for 2010. It sees inflation slowing to 4.4% in 2009 and 4.1% in 2010.
The Commission attributes sharp impact of the financial crisis to GDP growth and forecast GDP contraction of 6.3% in 2009 to be followed by a 0.3% drop in 2010. Private consumption is forecast to fall 6.6% this year and investments assumed to decreases 10.6%. (MTI-Econews)