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Hungary's current account deficit may shrink faster than plan

Hungary's current account deficit, the broadest measure of money flowing in and out of a country, may shrink faster than the government's plan, Prime Minister Ferenc Gyurcsány said today.

Government austerity measures may lower the shortfall more than Hungary pledged in its Convergence Program, the deficit-cutting plan endorsed by the European Union earlier this month, Gyurcsány said during a meeting with US investors. Gyurcsány has raised taxes and cut subsidies to slash the EU's widest budget deficit. The government also plans to overhaul education, health care, pensions and public administration to save money. The premier's cabinet this week approved the final draft of the 2007 budget, the first since the measures were announced. „This is a tight, strict budget,” Gyurcsány said. „This budget will fulfil the pledges of the Convergence Program. And based on fresh data since August, it is set to perform better than plan with regards to the current account deficit.” Hungary in the Convergence Program pledged to cut the current account gap to 5.9% of gross domestic product next year from an estimated 7.9% this year. By the end of the government's term in 2010, Gyurcsány wants to reduce the shortfall to about 3% of GDP. (Bloomberg)