The Hungarian Government is determined that the EDP against Hungary be closed at the earliest opportunity, and has therefore decided to propose further steps with a view to complying with the expectations of the European Union.
Although the Hungarian Government, along with leading financial analysts, forecasted that the fiscal adjustment measures announced in October would be sufficient to meet the 2013 budget targets, the Government has decided to complement those measures with a further adjustment package worth €1.3 billion (367 billion forints) in 2013, thus avoiding any new steps in the Excessive Deficit Procedure against the country.
Recently announced measures include doubling the financial transactions tax, adding revenue of 130 billion forints as well as keeping the bank levy unchanged, resulting in additional revenue of 72 billion forints. Furthermore, local business tax rules will be changed, generating 35 billion forints and the government will introduce a utilities tax that will generate 30 billion forints more in budget revenue.
International financial analysts (Raiffeisen Bank, Erste Group Bank AG) have generally welcomed the declaration, stressing that the envisaged measures would be more than enough to ensure the shortfall stays below 3 per cent of economic output, thus ensuring the closure of the Excessive Deficit Procedure against Hungary. According to some estimates, next year’s deficit might as well drop to 2 per cent of GDP.
Earlier this month, the government already unveiled a fiscal adjustment package worth 397 billion forints for next year in a bid to meet deficit targets, which had met with a truly positive response in the markets, with the Hungarian currency jumping by around 1 per cent. Furthermore, the move to scrap the transactions tax on the central bank was seen by analysts as the removal of a major obstacle to the successful outcome of talks with international lenders.
Press release
© Hungarian Government
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article