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Hungary report to Brussels puts central budget deficit HUF 313bn over target

A report Hungary submitted as part of the European Union's excessive deficit procedure against it shows a cash flow-based central budget deficit of HUF 1,451.5bn this year, HUF 313bn over the target in the amended 2011 budget act, business weekly HVG said on its website on Wednesday.

The report, submitted to Eurostat on September 30 and published on the website of the Central Statistics Office (KSH), puts local councils' cash flow deficit at HUF 150bn in 2011, HUF 40bn over the targeted shortfall.

The deficit of the state's health insurance and pension funds is HUF 7.8bn higher in the report than in the budget act, but the surplus of separate state funds is HUF 12.8bn over the target in the budget act. The deficit of the central government is HUF 308bn more than the HUF 1,184.2bn target in the budget act.

The National Economy Ministry said in its latest general government report, published on September 22, that it was standing by the above cash flow-based central government deficit target for this year.

National Economy Minister György Matolcsy said earlier that the deficit could be HUF 100bn higher because of slower than expected growth. The government announced on September 6 measures to plug the hole, including higher excise duties and gambling taxes, as well as more efficient tax collection and a freeze on public procurements until the end of the year. Parliament approved the tax increases a week ago and they are to come into force on November 1. The government has also issued decrees freezing public procurements and prohibiting the spending of residuals this year.