HUNGARY: Economy Minister Says Budget Deficit Likely to Be 4.5% of GDP This Year

Economy Minister Marton Nagy said in an interview with Reuters that a combination of anaemic European growth and pre-election government spending could push Hungary's budget deficit as high as 4.5% of GDP this year. More from the Reuters piece below:

• Inflation remains a "public enemy" Nagy said. The government is continuing to cap the prices of some core household goods while the recent strength of the country's currency, the forint, was also helping
• "I would say that there is more of an advantage to a strong currency at the moment than a disadvantage"
• Nagy said it would be "naive" not to expect a government to be increasing spending going into an election, although he knows there are limits
• He said rating firms seemed a bit more "relaxed" since the country borrowed 3 billion euros in the market
• The government recently slashed its economic growth forecast to 1% for the year from the 2.5% it had previously expected. Nagy said it could come in fractionally lower still given Europe's sluggishness, although even a rate of 0.7% wouldn't be material for the budget given domestic consumption and VAT revenues were holding up