The deficit target of 1 percent of GDP contained in next year’s budget can be achieved if fiscal reserves are not entirely depleted, the National Bank of Hungary (NBH) said in an analysis of the government’s 2020 budget bill released on Thursday.
The NBH projected shortfalls for some revenue targets and put the deficit at 1.4 percent of GDP if the 488 billion forint of fiscal reserves are not spent in their entirety.
It said the fall in the public debt was likely to be smaller than the 3.1 percentage point target. The budget targets the public debt as a percentage of GDP at 65.5 percent at the end of 2020, down from 68.6 percent at the end of 2019. The NBH projects the debt will fall to 65.4 percent from 68.1 percent.
Budget Deficit 39.1 pc for Full-Year Target at End-June
The bank said the government’s growth target of 4 percent of GDP “well exceeds” its own forecast for growth of 3.3 percent as well as the projections of market analysts.
Inflation projections in the budget are lower than those forecast by the central bank, the NBH said.
Meanwhile, the State Audit Office (ÁSZ) said this year’s general government deficit target was achievable in an assessment of fiscal trends released on Thursday. Risks on the expenditure and revenue sides of the budget are balanced, ÁSZ said in the assessment.
ÁSZ noted risks of revenue shortfalls from corporate tax and payroll tax, while it said there could be overshoots of spending on forint debt costs, contributions to the European Union budget, subsidies and healthcare.
Lawmakers are scheduled to vote on next year’s budget on Friday.
In the featured photo MNB governor György Matolcsy. Photo by Szilárd /MTI