Economic research institute Kopint-Datorg sees an urgent need to prepare a Ft 500 billion deficit reduction package, analysts at the institute announced on Tuesday.
In the absence of a fiscal adjustment, this year's pension-reform-adjusted ESA general government deficit could reach 6.7% of GDP, well over the 4.7%-5% government projection, according to the fresh report published by Kopint-Datorg. The institute notes that need to act quickly is highlighted by the fact that the cash flow-based general government deficit reached almost Ft 800 billion in the first quarter and is expected to grow a further Ft 159 billion in April.
Kopint-Datorg expects Hungary's economy to expand 4.3% in 2006, similar to the rate of growth in 2005. It projects a foreign trade deficit of €3.7 billion and a current account deficit of €6.8 billion for 2006. Consumer prices will rise an average 2.4% in 2006, Kopint-Datorg said.