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Hungary: Gov’t lowers GDP growth targets, raises inflation targets

The government’s first conversion program report of the year for Brussels, approved at a cabinet meeting on Wednesday, shows the same deficit target for 2009, but lower growth targets and higher inflation targets for 2008 and 2009.

The report sees the general government deficit narrowing to 3.2% of GDP by 2009, unchanged from the target in the updated convergence program submitted to Brussels last November. It puts Hungary’s state debt at 65.6% of GDP in 2010, up from the 63.3% target in the updated convergence program.

The report projects GDP growth of 2.4% in 2008 and 3.9% in 2009, down from 2.8% and 4.0%, respectively, in the November convergence program. The report shows an inflation target of 6% 2008 and 3.6% in 2009, up from 4.8% and 3.0%, respectively, in the updated convergence program. The report sees domestic consumption expanding 1.6% in 2009 after a small contraction in 2007. It puts investment growth at 4% in 2008 and 7% in 2009. (MTI-Econews)