IMF: Hungary state debt will rise in 2014

MNB

The International Monetary Fund (IMF) sees Hungary's gross state debt rising from 79.8% at the end of 2013 to 80% in 2014 before falling to 79.7% in 2015, the lender said in its newly-released biannual Fiscal Monitor. 

Due to a downward revision of nominal GDP, the official statistics office has recently revised the 2012-end debt ratio up to 79.8% from 79.2%. The IMF expects the redistribution rate in Hungary to rise from 47.6% this year to 48.7% in 2014, and peak at 49.1% in 2017.

The Fiscal Monitor puts the general government deficit at 2.7% of GDP in 2013, in line with the government target, and at 2.8% in 2014, just under the 2.9% the government calculates with in next year's budget. The IMF publication projects the ratio to then rise to 3%, the maximum allowed in the European Union, and stay at that level through 2017.

The IMF forecasts a steady although narrowing primary surplus in the years ahead. The primary surplus will drop from 2% of GDP last year to 1.2% of GDP this year and to narrow to 1.1% in 2014.

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