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General gov't surplus preliminary HUF 35.4 bln in May

Hungary had a HUF 35.4 billion cash-flow based general government deficit, without local councils, in May, preliminary figures published by the Finance Ministry show.

The May surplus falls short of the ministry's forecast for a surplus of HUF 60.8 billion.

The monthly surplus brought the January-May cash-flow deficit, excluding local governments, to HUF 568.7 billion, or 2.2% of GDP. The five-month deficit reached 57.2% of the full year target as opposed to 46.8%, or HUF 424.8 billion, in the same period last year.

In its latest forecast in May, the ministry announced its H1 deficit forecast of HUF 844.3 billion, or 3.3% of GDP, and announced a further HUF 150 billion deficit target for H2. The first half deficit target thus leaves room for a HUF 275.6 billion deficit in June.

Last month a delegation from the International Monetary Fund (IMF) and the European Commission said they agreed that Hungary's general government deficit could reach 3.9% of GDP in 2009 instead of the previously targeted 2.9% for the year as the result of a deeper-than-expected 6.7% contraction of the country's economy. The deficit is seen falling slightly to 3.8% in 2010 as GDP drops 0.9%.

The lower-than-expected May surplus stemmed from a HUF 37.2 billion surplus in the central budget as opposed to the projected surplus of HUF 65.8 billion. The HUF 4.7 billion surplus in social-insurance funds was in line with the HUF 5.0 billion forecast, while the deficit in separate state funds was HUF 6.5 billion, down form the expected HUF 10 billion.

The five-month central budget deficit of HUF 497.4 billion accounts for 60.7% of the full-year target and stands just HUF 22 billion above the same period last year.

The social-insurance deficit of HUF 89.3 billion in January-May accounts for a similar 59.6% of the full-year target and follows a deficit of just HUF 2.1 billion in the same period last year, though this year's deficit target of HUF 149.9 billion is more than double that of the HUF 73.4 billion deficit last year.

Separate state funds had HUF 18 billion five-month surplus as compared to a forecast deficit of HUF 25.1 billion for the whole year, preliminary finance ministry figures show. (MTI – Econews)