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Matolcsy: Final 2010 budget gap will be close to 3.8% of GDP

The final 2010 general government deficit will be close to the originally planned 3.8% of GDP, National Economy Minister György Matolcsy said on Tuesday at a conference organized by economic daily Világgazdaság and Ernst & Young in Budapest.

Last Thursday state secretary for the Prime Minister's Office Mihály Varga said Hungary's 2010 general government deficit may have reached 4.1-4.2% of GDP due to gaps in local council budgets. Local councils' 0.9%-of-GDP deficit will add to the 3.3% central government deficit, bringing the final combined accrual-based figure to 4.1-4.2% last year, Varga said.

Central Statistical Office (KSH) will publish final figures for 2010 on Friday.

The government plans to cut public debt in one step mid-year, mainly from pension fund assets, Matolcsy said on Tuesday.

The minister also said that patriotic economic policy requires economic growth. Matolcsy sees unemployment below 11% at year-and, after it increased to an average of 11.5% in December 2010-February 2011, up from 11.2% in November-January, and up from 11.4% in the same period a year earlier, as KSH reported on Tuesday.