Hungary will submit a review of its convergence programme on January 31 instead of the usual early December, in line with a decision taken by the EU, the business daily Napi Gazdasag reported on Monday.
As a result of runaway deficits among member states and the pursuant excessive-deficit procedures, the EU proposed in late October that the countries outside of the euro-zone should submit their updated convergence programmes by January 31 instead of the usual end of December. The EU want member states to eliminate the budgetary incentives introduced as a result of the crisis and begin budget consolidation in 2011 at the latest. The minimum deficit cut must significantly exceed the level set earlier, that is 0.5pc of the GDP.
As reported earlier, Hungary’s cash-flow deficit came to HUF 918.6bn last year compared to the projected HUF 992bn, therefore the 3.9pc ESA deficit target is likely to be met. At the same time, the Czech Republic and Slovakia are projected to have deficits reaching 6.6pc-7pc and 6.3pc of their GDPs, respectively.
The end-of-January deadline allows for a revision of this year’s budget processes. In December last year, the budget had a surplus exceeding the target by HUF 70bn due to VAT and excise duty revenues, while corporate tax revenues remained below repeatedly downgraded projections. Finance Minister Peter Oszko told the paper last week that the ministry will analyse the data and, if necessary, make changes to this year’s budget forecast, which can be included in the updated convergence programme to be submitted at the end of January.