According to data published earlier today by the Hungarian Central Statistical Office (KSH), the budget deficit calculated on the basis of EU methodology was 2% of GDP in 2012, which is more favourable than formerly anticipated by the European Commission in its 2012 Autumn Forecast.

The forecast sent to the European Union confirms that the deficit figure of 2.7% projected by the Government for this year will also be achieved. These developments prove that the Government has been committed to and is capable of keeping the deficit persistently below 3% and thus the country stands a good chance of exiting the Excessive Deficit Procedure, a process that has been on-going for nine years now.

Erste Investment Ltd’s analyst Zoltán Árokszállási and Zoltán Török, Raiffeisen Bank’s senior analyst have both welcomed the low figure, with Mr Árokszállási stating that this further decreases the risk of 2013’s deficit exceeding 3%.  Mr Török highlighted also that the 2013 budget’s 400 billion forints reserve might be enough to keep the deficit target under 3%. The IMF’s annual country report also recognises the favourable budget figure as one of the significant strides made towards fiscal consolidation.

(Ministry for National Economy)