Hungary’s ex-fin min denies 6.5 pct deficit report

BUDAPEST, May 29 (BestGrowthStock) – Hungary’s former finance
minister denied a media report on Saturday that the budget
deficit could hit 6.5 percent of gross domestic product this
year, far above the 3.8 percent target.

Financial news website napi.hu, citing a finance ministry
document to be handed over to Hungary’s new government on
Monday, reported that the 2010 deficit could be 6.5 percent of
GDP, eclipsing the target agreed with international lenders.

“Not a word of this is true,” former finance minister Peter
Oszko told Reuters.

“The prognosis section of the documentation is public, our
projections are clear. This was published on the finance
ministry’s website. There is no way for 6.5 percent to come out
other than by intentionally increasing the deficit.”

Hungary’s centre-right Fidesz government, which took office
on Saturday, has repeatedly said that this year’s deficit could
well exceed the previous government’s target — an allegation
that ex-finance ministry officials have consistently rejected.

Analysts polled by Reuters earlier this week estimated the
2010 deficit at 5 percent of GDP. [ID:nLDE64P2J2]

Earlier this month the finance ministry published parts of
the handover documentation on its Web site, which acknowledged
the existence of some budget risks but said the deficit target
was achievable with continued tight fiscal policy.

It said the risks included lower-than-expected income tax
revenues and higher subsidies to state railway company MAV and
local governments.

Oszko said the 3.8 percent target could be achieved with
very tight budget control, although there were risks worth a few
tenths of a percentage point.

Investment

(Reporting by Gergely Szakacs and Krisztina Than; Editing by
Mark Heinrich)

Hungary’s ex-fin min denies 6.5 pct deficit report