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FinMin sees deficit reaching 82% of full-year target in May

The Finance Ministry expects the general government deficit to reach HUF 719.4 billion at the end of May, or 82% of the full-year target, state secretary Tamás Katona said at a press conference on Wednesday.

The ministry is standing by its full-year cash flow-based deficit target of HUF 878.9 billion, or 3.8% of GDP, Katona said.

In March, the general government deficit, excluding local councils, was HUF 259.3 billion, and it reached HUF 609.9 billion in January-March. The deficit for April is expected to reach HUF 82 billion and the ministry puts the deficit in May at HUF 27.6 billion.

Answering a question, Katona said expenditure items had been bigger, in proportion to the period of time, in the first half for years. There are several big revenue items in the second half of the year, such as corporate tax, paid in December, he added.

Speaking about the March general government balance, Katona said revenue from personal income tax, VAT and contributions had been in line with or over the forecast, but revenue from excise tax and corporate tax was less than expected.

Corporate tax revenue came to HUF 71 billion at the end of March and is expected to reach HUF 143 billion by the end of May, Katona said. The full-year projection is HUF 564 billion, well under the original target of HUF 609 billion in the budget, he added.

The report Hungarian sent to the European Commission at the beginning of April showed a 4.0%-of-GDP in 2009, Katona said. The deficit ratio could be the same in the report to be submitted in August, to contain balances of local governments, and could even be under 4.0%, he added. (MTI-ECONEWS)