State could spend HUF 500 bln in H2 to protect economy

Government

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The government could spend around HUF 500bn in the second half of the year to protect the economy from the effects of the coronavirus pandemic, Peter Benő Banai, the state secretary in charge of the budget said on Kossuth Radio on Tuesday.

Graphic by Ink Drop /Shutterstock.com

Spending on healthcare measures for pandemic defense could be smaller than before as all necessary equipment has already been purchased and the healthcare infrastructure has been improved, he added.

Banai said GDP shrunk in H1 but the fall has been smaller than the EU average and by next year the situation could start to "consolidate".

The budget for 2021 calculates with GDP growth above 4% and a deficit below 3%.

It is unclear if the budget will need to be modified, this will depend on the number of coronavirus cases and the situation in export markets, he added.

Banai confirmed the Finance Ministryʼs forecast that Hungaryʼs general government deficit could reach 7%-9% of GDP this year.

He said "we have grown unaccustomed to these high numbers" as in past years the deficit has always been below the 3% EU-mandated limit.

Hungaryʼs economy contracted 13.6% year-on-year in the second quarter.

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