The Hungarian government on Monday submitted the country’s draft 2014 budget to parliament, with the deficit targeted below the European Union’s scrutiny threshold.
“We’re planning to keep fiscal prudence while cutting household utility prices,” Economy Minister Mihaly Varga said.
The government aims to meet a budget deficit goal of 2.9% of gross domestic product next year, a level that is higher than the 2.7% planned in the country’s last convergence report in April, a document regularly submitted to the EU, which eyes member countries’ fiscal prudence.
Analysts have warned that as general elections are nearing the government’s so far strict approach to budget prudence could become laxer. The ministry has already started to spend its budget reserves.
The country’s budget whistle blower, the Fiscal Council, warned recently against what it called an “election-year budget,” stressing there’s no room for maneuver in 2014.
The country’s economy ministry based its 2014 calculations on a GDP growth forecast of 2% on the year. Hungary, which exited the EU’s budget surveillance program–or Excessive Deficit Procedure–earlier this year, is expected to see economic growth of 0.7% this year after a 1.7% contraction last year.
The government projects the country’s nominal GDP will rise next year to 30.629 trillion forints ($138.6 billion) from this year’s expected HUF29.203 trillion.
Source: online.wsj.com, Photo: tozsdeforum.hu