Hungary’s budget deficit ends year well below target

By bne IntelliNews January 6, 2016

Hungary’s budget deficit finished 2015 at around 2% of economic output, Economy Minister Mihaly Varga announced on January 6.

The reading is well below the target of 2.4%, and also the 2.5% deficit the country reported in 2014. The positive result reflects higher tax revenues generated by the expanding economy. The minister estimates Hungary’s economy grew by some 2.8%-2.9% last year. However, that is a slowdown from the 3.7% growth seen in 2014, and expectation is rife that 2016 will continue that trend.

Detailed figures on the budget deficit will be published later this year, state secretary Peter Banai said. He noted that the nominal budget gap is likely to be HUF400bn (€1.3bn), or around half the original target of HUF892bn, once adjusted for EU funds Hungary did not receive.

Along with trimming the budget deficit, the government also succeeded in reducing the debt-to-GDP ratio, Varga claimed. He estimates the end-2015 ratio dropping to below 76% from 76.2%, where it sat at the end of 2014.

Dropping the state debt is vital for Budapest, which has been flirting with breaking debt rules of the EU's excessive deficit procedure. Hungary is also desperate to restore its investment grade sovereign rating. Alongside high state debt, the issues surrounding policymaking and the banks have helped persuade the rating agencies to keep Hungary in junk status since 2011.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Articles

Ukraine places $3bn in 15-year Eurobonds at 7.375%

Ukraine has placed $3bn in 15-year Eurobonds at 7.375% per annum, Ukrainian President Petro Poroshenko said during a meeting with international investors in New York on September 18. "Ukraine has ... more

Iran introduces its own rating system for banks

Governor of the Central Bank of Iran (CBI) Valiollah Seif has announced that his institution is to launch a national rating system for banks, Iran Labour News Agency reported on September 17. ... more

October local elections to test Macedonia's fragile political stability, IMF warns

The International Monetary Fund (IMF) said on September 18 it expects the Macedonian economy to slow down to moderate growth of 1.9% in 2017 due to the prolonged political uncertainty. The fund ... more

Most Read

  1. STOLYPIN: Russia balances wargames with mindgames in Zapad exercises
    3 days ago
  2. Volkswagen doubles exports of Russia-made cars
    8 days ago
  3. Russia's Binbank asks central bank for help
    3 days ago
  4. ISTANBUL BLOG: Commerzbank ignites quarrel claiming Turkey’s official growth figures are “more than questionable”
    10 days ago
  5. Kremlin to launch massive infrastructure projects in 2018
    2 days ago
  1. ISTANBUL BLOG: Commerzbank ignites quarrel claiming Turkey’s official growth figures are “more than questionable”
    10 days ago
  2. Hungary threatens to block Romania’s OECD accession
    17 days ago
  3. Economists tangle over risk of a Greek-style collapse in Turkey
    21 days ago
  4. Wild capitalism threatens the untamed rivers of Southeast Europe
    1 month ago
  5. Russia’s government moves from war budget to election budget
    29 days ago

Selected articles from our premium news/views wire IntelliNews Pro

Login to IntelliNews Pro
Get IntelliNews Pro

Reports

Dismiss