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Gov't supports expenditure cuts as budget revenue falls

The government supports the proposal - in light of the effects of the global financial crisis on Hungary - to cut state expenditures as revenue from taxes and contributions falls, Finance Minister János Veres said in parliament.

The government's 2009 budget bill, which was revised in November after Hungarian and global markets plunged, targets a general government deficit equivalent to 2.6% of GDP, down from 2.9% in the budget bill submitted to Parliament in October.

The budget bill targets a 1.9%-of-GDP surplus in the primary balance, Veres said.

To cut costs, the government plans to freeze wages for public servants and pay no annual bonuses, Veres said. It will place a HUF 80,000 cap on annual bonuses for pensioners and put a 4.5% limit - in line with the inflation projection - on the increase in family subsidies.

The government has withdrawn earlier planned tax cuts and made greater efforts to crack down on the shadow economy, he added. (MTI – Econews)