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Gripen deliveries could add 0.3% of GDP to deficit in 2006

The recording of Gripen aircraft deliveries as government expenditure could raise Hungary's general government deficit by the equivalent of 0.3% of GDP in 2006 and could add 0.2% of GDP to next year's deficit, Finance Minister János Veres told journalists in Brussels according to a report in Thursday's daily Népszabadság.  

Veres' comment came after the European Union's statistics office Eurostat said last week that in the case of long-term military supply contracts the value should be recorded as government expenditure in national accounts at the time of the actual delivery of the equipment. Veres added that recording the aircraft purchase as a deficit-raising item will not generate additional demand and therefore would not affect Hungary's plans to meet the Maastricth criteria in 2008 and introduce the euro in 2010.

 

Hungary is targeting an ESA95 general government deficit of 4.7% of the GDP this year, 3.4% next year and 1.9% in 2008 after full adjustment for the effect of pension reform.