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Veres: Hungary to meet 2007 deficit target

Hungary's general government deficit will be 6.8% of GDP at most in 2007, in line with the target in Hungary's convergence program, Finance Minister János Veres said after a cabinet meeting on Wednesday.

"Next year's budget contains sufficient reserves to allow the country to safely meet the 6.8% deficit target," Veres said. The government used a conservative planning method when drawing up next year's budget and it strived for surety, he said, adding that the additional interest expenditures resulting from a rise in securities yields following anti-government protests in September, a well as the current, more stable situation had been taken into account when drawing up the budget. Veres said the government had approved the framework of the 2007 budget, but it would put together its main figures only in the coming week. The government will submit the budget to Parliament on October 31, and Parliament could hold its final vote on the budget on December 22.

Veres said the 2007 budget allocates the necessary co-financing to avail of EU funding. He said budget-funded institutions would be required to set aside 3% of their budget funding as reserves. Their balance will be evaluated on a quarterly basis, and, if it is positive, they may use up the reserves. Speaking about this year's budget, Veres said the ministries have asked for an additional Ft 300 billion over their spending targets, but only Ft 36 billion is available. Ministries will not receive any less next year than this year, except in instances in which activities have been transferred from one ministry to another, he said, answering a question. (Mti-Eco)