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Gov’t keeps 2009 budget forecasts unchanged

Hungary's Finance Ministry saw fresh economic data fit its expectations in August and left its budget deficit forecasts unchanged for the third quarter and the end of the year, the ministry said.

The cash flow based budget deficit is seen at HUF 1,067.7 billion or 4.1% of GDP by the end of the third quarter, the same as earlier forecasts, the Finance Ministry said. For the full year, the cash-flow deficit is seen at HUF 991.8 billion or 3.8% of GDP, the ministry said.

Data released in August fully fits previous expectations, ministry state secretary Tamás Katona told a news conference. Based on European Union accounting rules, the full-year deficit is expected at 3.9% of GDP, Katona added.

Hungary, which was the first European Union nation during the global economic crisis to secure an IMF bailout, is aiming to trim the deficit to 3.8% of GDP based on EU accounting rules in 2010 under the terms of that deal. The nation’s economy is expected to shrink by 6.7% this year, and a further 0.9% next year, eating deep into revenues.

Still, Katona said tax revenue targets and the deficit target were “attainable.” He added the ministry considers the current market environment beneficial and demand for government bonds sufficient to say things are back to “business as usual.” (Reuters)