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Fiscal Council: 2021 Budget Deficit Target Needs to Be Raised

MTI-Hungary Today 2021.04.16.

Hungary’s Fiscal Council noted on Thursday the deficit target in the 2021 budget would have to be raised.

The government earlier said it would raise the 2021 deficit target, calculated according to European Union accounting rules, from 2.9 percent to 7.5 percent of GDP. Hungary has reached 36 percent of the original full-year deficit target by the end of February.

The council said it agreed that the deficit target, in light of the third wave of the pandemic, necessitated greater spending on health care and the economy than initially planned, and it welcomed that the target was lower than last year’s.

The draft amendments will raise the 2021 cash-flow deficit target to 2,288 billion forints, it said, noting however that the number was inconsistent with the ESA deficit target of 7.5 percent of GDP. The cash-flow target should be changed to 3,990 billion, it said.

The public debt target of 79.9 percent of GDP in 2021, down from 80.4 percent in 2020, was “in line with expected economic growth”, it said.

In the featured photo: Árpád Kovács, the head of the Fiscal Council. Photo by Tamás Kovács/MTI