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Interfax: Hungary had highest budget deficit in EU in 2006 at 9.2% of GDP

Interfax: Hungary had highest budget deficit in EU in 2006 at 9.2% of GDP

23.4.2007 17:02
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BUDAPEST. APRIL 23. INTERFAX C.NTRAL EUROPE - Hungary's budget deficit was the highest in the European Union for the second consecutive year in 2006 in terms of gross domestic product (GDP), even as the EU average deficit fell, according to a report published Monday by Eurostat, the EU's statistical office, based on data provided by member states.

According to final figures in line with the EU's ESA accounting standard, the general government deficit of Hungary was 9.2% of GDP in 2006 at HUF 2,163 bln, significantly higher than the 6.1% originally approved by Parliament.

After Hungary, Italy had the second highest deficit last year at 4.4% of GDP, followed by Portugal and Poland at 3.9% each and Slovakia at 3.4%. Italy and Portugal are members of the eurozone, where the deficit should in theory stay under 3%, as set down by the Maastricht Treaty.

Eurostat noted that EU members' budget figures mostly improved last year, as deficits narrowed or surpluses widened in 22 out of 27 member states.

"In 2006 the government deficit of both the euro area and the EU27 fell compared to 2005," the report reads, while also noting that 11 of 27 members actually recorded a surplus last year. "In the euro area the [average] government deficit decreased from 2.5% of GDP in 2005 to 1.6% in 2006, and in the EU27 it fell from 2.4% to 1.7%."

Hungary is planning to reduce its budget deficit to 6.6% of GDP this year and close to 3% by 2009.

Government debt in Hungary was 66.0% of GDP according to Eurostat, above the 60% Maastricht level and also exceeding the previous year's 61.7%. Overall government debt in the EU27 fell from 62.9% of GDP in 2005 to 61.7% in 2006.


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