Economy
Former Hungarian FinMin warns of 2009 deficit goal overshoot risks
On 10 December 2003, the Finance Ministry had adjusted its full-year deficit goal and then the estimate was overshot by 0.4 percentage points, László reminded at a conference organised by the International Centre for Economic Growth (ICEG) and the Hungarian Business Leaders Forum (HBLF) on Friday.
The ministry sticks to its forecast for a 3.9% of GDP gap, which both the International Monetary Fund (IMF) and the European Commission deem achievable. By now, the market’s estimate of a possible overshoot decreased to 1-2 ppt. Meanwhile, László believes there are two main factors that could “easily cause a HUF 50-100 bn slippage".
1) corporate tax payments due on 20 December could turn out to be smaller than planned
2) Christmas shopping may be more muted than before as a result of the scrapping of the 13th-month pension and wage freezes in the public sector.
There is always an 0.3-0.5-ppt margin of error in the budget planning that should be considered now, László added.
Other reports from today's conference:
The ministry sticks to its forecast for a 3.9% of GDP gap, which both the International Monetary Fund (IMF) and the European Commission deem achievable. By now, the market’s estimate of a possible overshoot decreased to 1-2 ppt. Meanwhile, László believes there are two main factors that could “easily cause a HUF 50-100 bn slippage".
1) corporate tax payments due on 20 December could turn out to be smaller than planned
2) Christmas shopping may be more muted than before as a result of the scrapping of the 13th-month pension and wage freezes in the public sector.
There is always an 0.3-0.5-ppt margin of error in the budget planning that should be considered now, László added.
Other reports from today's conference:
