Hungary’s Finance Ministry attributes the discrepancy between its own general government deficit projections for 2011 and 2012 and projections by the Fiscal Council to different macroeconomic prognoses, the ministry said late Monday.
While the Fiscal Council’s outlook for 2010 is more optimistic than those of the Finance Ministry, the National Bank of Hungary and the IMF, its projections for 2011 and 2012 are more pessimistic, the ministry said.
The Fiscal Council, an independent body recently established to review budget bills, on Monday said it saw overshoots of the general government deficit of up to 0.7pc of GDP in both 2011 and 2012.
The government expects a 2.8pc-of-GDP deficit in 2011 and a 2.5pc gap in 2012, according to the medium-term outlook outlined in the 2010 budget bill before Parliament.
The council said it believed additional expenditures related to losses at the National Bank of Hungary as well as less-than-expected revenue from taxes on consumption and personal income tax could cause the overshoot
The Finance Ministry said on Monday it considered the forecasts for 2011 and 2012 well-grounded on both the budget deficit and external factors, based on the government’s macroeconomic outlook.
The government expects GDP to fall 6.7pc in 2009 and 0.9pc in 2010, but grow 3.9pc in 2011, 4.0pc in 2012 and 4.1 in 2013.
The latest IMF forecast from September shows Hungary’s economy contracting 6.7pc and 0.9pc, in 2009 and 2010, respectively, in line with the government targets, but growing 3.2pc in 2011, 4.5pc in 2012, 4.0pc in 2013 and 3.5pc in 2014.