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ESA deficit drops to 8.2% of GDP in Q2

The net financing requirement of the Hungarian general government, equivalent to the ESA95 general government deficit, was 8.2% of the seasonally adjusted GDP in the second quarter of 2006, the National Bank of Hungary (MNB) reported based on preliminary figures on its website on Wednesday.

The deficit is sharply down from a seasonally adjusted first-quarter deficit of 11.5% of GDP reported by the bank on July 3. Without seasonal adjustment, the preliminary Q2 deficit was 7.2% of GDP in Q2, down from 15.2% reported early July. The central bank figures are not adjusted for effects of the pension reform.
The government projects this year's ESA deficit at 10% of GDP before and 8.6% after adjustment for the pension reform, taking into account the deficit-reducing effects of the fiscal tightening measures announced early June and a July decision to record motorway costs within the budget.
In 2005, Hungary's ESA deficit was 7.5% before adjustment for the effects of the pension reform, and the adjusted deficit was 6.1% of GDP. At the end of June 2006, the general government gross consolidated debt at nominal value and on a Maastricht basis was Ft 15,537.6 billion (€56.39 billion) or 69.6% of the GDP of the last four quarters before adjustment for the pension reform, the central bank said. The figure is up Ft 563 billion from the end of March and also up from the respective March debt/GDP ratio of 68%. Hungary's public debt was equivalent to 58.4% of GDP at the end of 2005, after a 3.8%-to-GDP adjustment (reduction) for the pension reform.