Hungarian Government Aims To Hit Deficit Targets With Spending Cuts
- 28 Feb 2012 8:00 AM
"The government aims to bring the budget deficit down to 2.5% of GDP this year and to 2.2% by 2013, with new fiscal measures, largely affecting subsidies for drugs and Budapest public transport company BKV, Economy Ministry undersecretary Peter Beno Banai said. The government will reduce spending by Ft 28-30 billion, or 0.1% of GDP this year, and some Ft 120 billion next year, or 0.4% of GDP, according to plans published in official gazette Magyar Kozlony.
Analyst Gergely Csiky of business website Portfolio expects the fiscal adjustment to be higher than that, at Ft 100-150 billion this year and double that in 2013.
The government will slash spending on drug subsidies from Ft 376 billion in 2011 to Ft 277 billion this year, and the figure will drop further, Napi Gazdasag writes.
Csaba G. Toth, head of research at economic think tank Szazadveg, argues that the government needs to raise budget reserves, now at Ft 250 billion, by a further Ft 100-150 billion in order to manage risks over the course of this year and to hit deficit targets."
Source: Hungary Around the Clock
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