There is no need for any additional measures to meet this year’s deficit target of 2.4 percent of GDP, the government said in a report sent to the EU Council and the European Commission in response to a June 22 recommendation of the Council on measures to correct a significant budgetary deviation in Hungary.
The deficit target can be achieved without any sudden deficit-cutting moves, and higher tax revenue on the back of solid growth will be sufficient to meet it, the report said.
The deficit is expected to be on target with significantly revised expectations on the revenue and expenditure sides, it added.
The main deviation in spending is due to the lower-than-planned utilisation of EU resources, with EU-funded spending falling 0.4 percentage points of GDP and investment spending down by 0.8 percent of a point compared with initial estimates, the report said.
Adopting a recommendation of the European Commission, the Council in June recommended that Hungary take measures to ensure that the nominal growth of net primary government expenditure does not exceed 2.8 percent in 2018, representing an annual structural adjustment of 1 percent of GDP.
The Council set a deadline of October 15, 2018 for Hungary to report on action taken.
via MTI On the picture: Mihály Varga, Finance Minister Featured photo by Noémi Bruzák/MTI