Deficit target for 2019 realistic – Hungarian central bank report

The government’s budget deficit target of 1.8 percent of GDP set out in the 2019 budget bill is realistic, Hungary’s central bank has said.

Downside risks are possible on tax and excise revenue but state contributions towards development projects which receive European Union funding are likely to be lower than expected,

the National Bank of Hungary (NBH) said in its Budget Report released on Thursday.

Central government revenues may be lower by 0.6 percent of GDP, but spending is likely to be 0.5 percent of GDP below target, the bank said. Other factors, including savings from the Country Protection Fund could improve the budget balance by a further 0.1-0.2 percent of GDP, it added.

The 1.8 percent deficit target for next year compares with a 2.4 percent deficit target this year and conforms to targets set out in the government’s Convergence Programme.