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S&P forecasts high deficit

Hungary's public finance deficit will reach 11% of GDP in 2006 and will not go beyond 7.8% in 2008, credit rating agency Standard and Poor's (S&P) said on Monday.

S&P published a forecast on financial tendencies in Hungary, Poland, Czech Republic and Slovakia, and said that the Hungarian government's recently announced austerity measures alone would not be sufficient to restore the equilibrium of public finance, and could only be considered as a first step on the way to long-term stability. The government needs to implement structural changes on the spending side, especially in national health and social security, the report suggested.