Hungary's parliament approved on December 17 the state budget bill for 2014, which envisages a deficit of 2.9% of GDP calculated under the ESA-95 terms, portfolio.hu reported. The budget assumes a 2% y/y GDP growth and sees the annual inflation at 2.4%.
In cash terms, the deficit is planned at HUF 984.6bn (EUR 3.3bn) on HUF 15,984bn revenues and HUF 16,968bn expenditure. The gap equals to 3.2% of nominal GDP projection.
The authorities project the level of the government debt to decrease to 76.9% of GDP at end-2014, from 77.4% expected for end-2013. The government plans to consolidate the entire municipalities’ debt outstanding HUF 416bn into the central government.
Regarding tax policy, Hungary does not plan major changes to the legislation, except the envisaged wider availability of family tax allowances and the lower VAT on meat.
Key policy measures include continued hikes on teachers’ wages, the introduction of career progression model for social workers with wage hikes starting January as well as higher wages in public works programme.
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