Are you sure?

Narrower deficit in 2009 could put 2010 target at risk

Hungary's better-than-expected cash flow-based general government deficit of 3.6% of GDP could put the 2010 deficit target at risk, chairman of the Fiscal Council György Kopits said on Thursday.

The full-year general government deficit for 2009 came to 3.6% of GDP, under the projected 3.8%.

Budget revenue equivalent to 0.2% of GDP that should have been booked in 2010 came in already in 2009, Kopits said. Revenue from excise tax stamps rose at the end of the year as companies anticipated an excise tax hike from January, and a VAT return for state-owned railway company MAV was put off, he explained.

The targets in the 2010 budget are achievable, and the budget is more transparent than in earlier years, but write-offs of majority state-owned companies to be booked in 2010 as well as losses of local councils could cause the deficit to widen by 0.75 percentage point of GDP, Kopits said. (MTI-Econews)