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General gov't runs bigger-than-expected surplus

Hungary's general government had a cash flow-based surplus of HUF 205 billion in December, well over the expected HUF 135 billion surplus, the Finance Minister said in a preliminary report on Tuesday.

The full-year general government deficit, came to 3.6% of GDP, under the projected 3.8%. Based on these figures, the general government deficit including local councils will most certainly meet the cash flow-based full-year target, the ministry said.

The ministry projects a 4.1%-of-GDP cash flow-based general government deficit, including local councils, for the full year.

The central budget had a HUF 176.8 billion surplus in December, the social insurance funds had a HUF 36.3 billion surplus and the separate state funds ran an HUF 8.1 billion deficit.

Expenditures in December were under those in the same month in 2008 and 2007, as projected by the ministry. The drop in spending was due in part to the setting aside of reserves and the result of expenditure reduction measures that have had a bigger effect since August. Monthly expenditures of budget-funded institutions have fallen in a twelve-month comparison each month since the end of the summer, the ministry said.

In absolute terms, the general government deficit, excluding local councils, was HUF 918.6 billion for the full year, under the ministry's projection of a gap of HUF 992.4 billion. The central budget had a HUF 737.2 billion deficit, the social insurance funds a HUF 151.0 billion deficit and the separate state funds a HUF 30.4 billion deficit.

In 2008, Hungary ran a cash flow-based general government deficit, excluding local councils, of HUF 910.6 billion, or 3.3% of GDP.

The ministry projects an accrual-based general government deficit, including local councils, of 3.9% of GDP for the full year in 2009. (MTI-ECONEWS)