The Hungarian government submitted the budget bill for fiscal year of 2015 to Parliament on Thursday. The bill, presented by Economy Minister Mihály Varga to House Speaker László Kövér one day before the legal deadline, targets a 2.4%-of-GDP public finance deficit, calculated with European Union methodology, lower than the 2.9% target for this year.
The government also targets a 0.9-percentage-points reduction of public debt as a percentage of GDP to 75.4%, excluding exchange rate changes.The bill assumes GDP growth of 2.5% and a 2.6% rise in household consumption. It calculates with a 1.3% increase in employment, 1.8% average annual inflation and external financing capacity equivalent to 8.4% of GDP. Varga said sectoral taxes, such as those on advertisers and banks, would remain in place in 2015.
The Fiscal Council on Monday identified some risks with the bill, but did not raise objections on the whole. The Council pointed to risk of lower economic growth and lower inflation, warning that greater reserves would be needed to safely meet the deficit target. The Council also noted that detailed information on measures related to tax revenue and expenditure cuts was lacking. It said that a planned reduction of the state debt ratio, to 75.4% of GDP at the end of 2015 from an expected 76.3% at the end of this year, could be met even if GDP will grow slightly less and the deficit will be slightly higher than projected in the draft.
via hungarymatters.hu photo: Károly Árvai – MTI