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Fiscal Council sees deficit overshoots

Hungary's Fiscal Council, an independent body recently established to review budget bills, sees overshoots of the general government deficit of up to 0.7% of GDP in both 2011 and 2012, the council announced on Monday.

The government targets a 2.8%-of-GDP deficit in 2011 and a 2.5% gap in 2012, according to the medium term outlook outlined in its 2010 budget bill already introduced to Parliament.

The council believes additional expenditures related to losses at the National Bank of Hungary as well as less-than-expected revenue from taxes on consumption and personal income tax could cause the overshoot.

Losses at state-owned companies could cause the deficit to widen further, by several tenths of a percentage point, a possibility that is not shown in the budget bill as the general government balance has not been calculated appropriately, the council said.

The council made the statement after discussing legislation proposed by the government related to the 2010 budget act. (MTI-ECONEWS)