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October fiscal deficit preliminary HUF 11.6 bln, below forecast

Hungary posted a cash flow-based general government deficit, excluding local governments, of HUF 11.6 billion in October, The Finance Ministry said on Thursday. The figure is slightly under the ministry's forecast for a HUF 13.5 billion deficit.

The January-October deficit came to HUF 742.6 billion, also slightly under the ministry's mid-October HUF 744.5 billion forecast, calculated on a cashflow basis and excluding local governments. The January-October deficit was equivalent to 2.7% of projected GDP, unchanged from the end of September.

All the three subsystems of the general government closed October with slight deficits.

The central budget posted a HUF 3.7 billion deficit last month, the social insurance funds ran a HUF 5.3 billion deficit and the separate state funds ran a HUF 2.6 billion deficit in October.

In the first ten months, the central budget registered a deficit of HUF 828 billion, down HUF 5.2 billion of the latest forecast, and 87.7% of the annual shortfall of HUF 943.9 billion projected in October.

The social insurance funds ran a ten-month surplus of HUF 10.9 billion, down a slight HUF 0.5 billion on forecast. The funds are projected to close 2008 with a deficit of HUF 12 billion.

The separate state funds had a surplus of HUF 74.5 billion in the first ten months, HUF 2.8 billion down on the respective forecast and against a projected annual surplus of HUF 27 billion.

In response to the global financial crisis and its effect on Hungary, the government reduced its 2008 ESA95 general government deficit plan from 3.8% of the GDP to 3.4% last month. The deficit had already been projected to fall below the original 4.0%-of-GDP target.

In line with the latest measures, the Finance Ministry projected the annual cash flow-based general government deficit, excluding local governments, at HUF 928.9 billion or 3.4% of GDP in its mid-October forecast, down HUF 103 billion from the respective September forecast of HUF 1,031.9 billion or 3.8% of GDP. (MTI – Econews)