State Secretary: Deficit target for 2015 realistic

Telco

The governmentʼs 2015 deficit target of 2.4% of GDP is still realistic considering the positive economic processes; the government will continue to analyze the processes and will ensure that fiscal discipline is maintained, state secretary of the National Economy Ministry Péter Benő Bánai said on Wednesday, Hungarian news agency MTI reported. 

Banai said that with a falling deficit curve in the coming years, in accordance with the outlook of the convergence program and the 2016 budget, the government is targeting a deficit of 2% of GDP in 2016 and 1.7% in 2017.

In response to a  query as to whether the government will review its GDP growth forecast for this year due to the weaker-than-expected second-quarter GDP data, Bánai said they still consider 3% GDP growth realistic for the full year after the release of the first-half figures. He added that the farm sector numbers influencing the second-quarter GDP data were not yet actual figures and there could be segments performing better than forecast in the remaining part of the year.

The state secretary noted that, on the revenue side, revenues from taxes and contributions were higher by more than HUF 400 bln or 6.5% in January-July than in the same period of last year. At the same time, expenditures also increased, including those related to teachersʼ wage rises, he added. The balance was deteriorated by the fact that disbursements of European Union funding to beneficiaries rose by HUF 170 bln from a year earlier

Disbursements are progressing better than last year, with disbursements of all EU programs exceeding HUF 1.200 trillion, Banai said. At the same time, European Union revenues included in the budget are down by HUF 280 bln from a year earlier due to ongoing disputes on certain issues between the government and the European Commission.

In the case of European Union revenues and disbursements, the balance of the budget is HUF 450 bln worse than last year, which has not been fully offset by increased revenues from taxes and contributions, the state secretary said.

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