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Gov't sees smaller economic contraction in 2010

The government has changed the GDP projection for 2010 from a 0.6% contraction in the previous update of its convergence program to a 0.3% fall in the new update, Finance Minister Péter Oszkó said at a press conference on Thursday.

The improved outlook is supported by exports, Oszkó said. For this reason, the government raised its projection for export growth from 3% to 5.5% in the fresh update of the convergence program. The projection for the current-account deficit was narrowed from 0.5% of GDP to 0.2%.

The updated convergence program shows the government's ESA '95 general government deficit target of 3.8% of GDP for 2010 is achievable, and Hungary's external financing capacity could reach 1.6% of GDP, Oszkó said.

The inflation projection was left unchanged at 4.1%.

The convergence program sees Hungary's gross state debt falling from 79% of GDP in 2010 to 76.9% in 2011 and 73.6% in 2012.

The government will send the updated convergence program to Brussels on Friday, after which it will announce the details of the update. (MTI-ECONEWS)