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Hungary deficit to fall under 3% in 2011, gov’t budget draft shows

Hungary’s accrual-based general government deficit will fall to 2.94% in 2011, National Economy Minister György Matolcsy said on Saturday, before submitting next year’s budget to Parliament.

The government confirmed in the previous weeks that it was committed to achieving the deficit target of under 3% of GDP in 2011.

The government targets a cash flow-based deficit of 2.8% of GDP, Matolcsy said.

The government targets a primary budget surplus – excluding interest costs – of 0.8-0.9% of GDP.

Interest costs on state debt are seen reaching HUF 1,055 billion in 2011.

The government targets 3.0% GDP growth and 3.5% annual average annual inflation, Matolcsy said. It expects the level of state debt to fall, he added.

The government plans to cut 25,000-30,000 of Hungary’s 690,000 public sector jobs next year, Matolcsy said. Staff numbers will be cut by 5% at central budget-funded institutions and by 10% at secondary institutions, he added.

Material costs will be reduced by 5%, he said.

Nominal wages in the public sector will be frozen in 2011, Matolcsy said. (MTI Econews)