Hungary's government, which ran up the European Union's widest budget deficit last year, said the shortfall in January was narrower than expected as the state received more social security contributions than it targeted.
The January deficit totaled Ft 196.1 billion (€772.8 million), compared with a government forecast of Ft 224.6 billion, the Budapest-based Finance Ministry said in a faxed statement yesterday. The one-month shortfall was 12.4% of the annual target. Prime Minister Ferenc Gyurcsány has raised taxes and cut subsidies to trim the shortfall, which he said was probably less than the government's revised target of 10.1% of GDP last year.
„Measures in late summer and in the fall of last year are beginning to bear fruit and the first results are visible,'' said State Secretary Miklos Tatrai on January 17. The cash-flow figures released today are a snapshot of the budget balance, measuring the immediate difference between revenue and expenditure in a given month. Based on those figures, the deficit was 8.7% of GDP last year.
That is different than the measure monitored by the EU, which also includes other items, such as debt and guarantees in the books and will be determined later. Gyurcsány estimated the EU-standard figure to come in at about 9.6% for last year and wants to narrow that to 6.8% this year. (Bloomberg)