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Official says Hungary to meet year-end deficit target in spite of vast Q1 gap

Revenue from extraordinary taxes due to flow into the government budget later this year will enable Hungary to meet its year-end deficit target of 2.8% of GDP in spite of exceeding the full-year target in the first quarter alone, National Economy Ministry Strategic State Secretary Zoltán Cséfalvay said.

On Tuesday afternoon the National Economy Ministry confirmed preliminary data showing that Hungary's cash-flow-based general government deficit, excluding local councils, reached HUF 742.1 billion in the first quarter of 2011, 108% of the full-year target.

Speaking at the Budapest Business Journal’s Annual Business Forum, Cséfalvay remarked that the extraordinary taxes to be phased out in 2013 are not aimed specifically at multinational corporations, noting that Hungarian companies are also paying the taxes levied on the telecommunications, energy and retail sectors.

The extraordinary bank levy and sector-based crisis taxes introduced last year are expected to generate HUF 187 billion and HUF 161 billion in revenue, respectively, in 2011. Revenue from the taxes will flow into the government budget in June and at the end of the year.