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Hungary 2012 deficit could hit 3.1% of GDP without further measures - MNB

Hungary's ESA general government deficit could reach 3.1% of GDP in 2012 if no further fiscal measures are taken, according to an analysis of the 2012 budget bill prepared by the National Bank of Hungary (MNB) staff and presented on Thursday.

The government deficit target of 2.5% of GDP for 2012 could still be achieved if some HUF 200bn in reserves in the budget are not spent, said MNB chief analyst Lóránt Varga.

The MNB projects GDP growth of just 0.6% in 2012, well under the 1.5% projection in the budget bill.

The central bank projected 1% GDP growth in September.

The MNB now expects tax changes to lift average annual inflation next year to 4.9%, up from 4.7% in the September forecast.