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Hungary gen govt deficit reaches 132.6% of modified full-year target by Sept

Hungary's cash flow-based general government deficit, excluding local councils, reached HUF 1,570.6bn in January-September, or 132.6% of the modified full-year target, the National Economy Ministry said on Friday.

In spite of the pro-rata overshoot, the ministry said it would still meet the modified target for the full year.

The ministry said that it was omitting the effect of the state's purchase of a 21.2% stake in Hungarian oil and gas company MOL for €1.88bn in a deal announced in May from annual comparisons because it is a one-off item.

Adjusted for the pro rata effect of HUF 528.8bn in revenue the budget is receiving from private pension fund assets transferred to the state's Pension Reform and Debt Reduction Fund and revenue from extraordinary sectoral taxes, as well as excluding the purchase of the MOL stake, the deficit would have reached HUF 768.7bn at the end of September, the ministry said.

The ministry modified its projection for the full-year deficit to 97.6% of the target. It projects a HUF 414.9bn deficit in the fourth quarter.

The projection for Q4 does not include a takeover of debt from railway company MAV and Budapest public transportation company BKV, costs related to the buyout of public private partnerships and an estimated HUF 255bn in VAT refunds the state must pay under a ruling by the European Court.

In a breakdown of the general government, the ministry said the central budget ran a HUF 1,365.7bn deficit in January-September. The gap for the social insurance funds reached HUF 280.0bn, but separate state funds had a surplus of HUF 75.1bn.

In September alone, the general government had a HUF 25.9bn deficit. The central budget ran a surplus of HUF 18.6bn, but the social insurance funds had a HUF 32.6bn deficit and the gap for the separate state funds was HUF 11.9bn.