Hungary to stick to public sector reforms, spending cuts in 2012 - report.

By bne IntelliNews July 28, 2011
Hungary's government plans to extend the reform programme in the public sector in 2012 through the introduction of additional material spending cuts and lay-offs, MTI news agency reported, quoting an article in Napi Gazdasag daily. The budget deficit is seen at 2.5% of GDP, which is in line with previous forecasts. The planned measures restrict the ministries from transferring funds within their annual budgets. In order to cut spending, the government will encourage mergers and eliminations of units, subordinate to the ministries. The wages in the public sector will be frozen. Decrease in revenues is, however, expected, too. The gross wage growth in the economy is expected at 4.4% in the next year, as inflation will decelerate to 3.5%. The GDP will rise by 3.1% y/y.

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