Prime Minister Ferenc Gyurcsány said on Thursday evening that the government had decided to convene an extraordinary session of parliament on January 29 in order to present measures aimed at adapting its current budget to the deteriorating economic outlook.
Speaking to reporters following a two-day meeting of the Hungarian Socialist Party, Gyurcsány commented that although none of the numbers contained in the 2009 budget are etched in stone, this does not mean that the budget can be softened. The prime minister said that the government is recalculating all the figures in the budget, adding that Hungary must remain on its current path toward budgetary balance.
The prime minister remarked that the government has very little room to maneuver with regard to the 2009 deficit target, adding that Hungary cannot permit itself to run a deficit of 3-5%. Gyurcsány said that the finance ministry would prepare the necessary forecasts and legal modifications in preparation for the extraordinary session of parliament over the next two weeks.
The prime minister estimated short-term “budgetary pressure” to be in the vicinity of HUF 100-200 billion, though cautioned that under such circumstances, tax hikes must not be used in order to finance expenditures at their previously stipulated level. Gyurcsány said that there is consensus among specialists that personal income taxes and social-security contributions must be reduced, though the prime minister could not specify precisely what sort of budgetary reallocation might be used to compensate for these measures.
Gyurcsány said that specialists have indicated that there is no need to formulate a new 2009 budget in the event of a shortfall in the HUF 100-200 billion-range. The prime minister reiterated that he does not want to raise taxes, but decrease expenditures to counterbalance the shortfall. “Basically we must take a look at how expenditures can be readjusted to make them compatible with lower revenue than previously expected. Imposition of austerity measures is not the only way of doing so,” the prime minister said.
The prime minister announced that the government would establish a crisis-prevention and -management center in connection in connection with the planned budgetary modifications, adding that this center will have two main missions: to prepare regulatory measures necessary for crisis management and, if necessary, intervene to provide assistance for companies and preserve jobs. (MTI-Econews)