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Parliament approves 2012 budget

Hungary’s parliament passed the 2012 budget law, targeting a deficit of 2.5% of GDP, early Tuesday morning with a vote of 255:48.

With the last-minute amendments initiated by the government on Monday, the approved budget targets revenues of HUF 14,340.9bn and expenditure of HUF 14,917.1bn, resulting in a deficit of HUF 576.2bn in 2012.

The deficit is unchanged while both revenue and expenditure is up about HUF 16bn from the original main figures approved by parliament on November 29.

The government announced last week it would amend the bill to reflect lower growth projection and a weaker forint, which would result in a HUF 320bn gap compared to the original plan.

The approved law is based on an exchange rate of 299 forints to the euro and GDP growth of 0.5%, instead of a HUF/€rate of 268 and GDP growth of 1.5% in the budget bill originally submitted to Parliament by the government.

The act projects average annual inflation of 4.2% for 2012.