Budget accepted

As expected the Parliament accepted the 2009 budget with 209 votes in favor and 171 against. Liberal SzDSz kept its promise and voted with the government in favor of the budget. The main number were set; the revenue is Ft8,300.2 billion, the expense is Ft8,961 billion while the deficit is set at Ft660.8 billion.


It is without precedents that in the last minute the Parliament has voted against the government's suggestion to decrease the sports fund of the municipalities so the expense side of the budget grew by Ft4.3 billion. On the initiative of the opposition parties the Parliament supported the version in which it would not increase the deficit but would take the amount away from the general reserve of the budget. As a result the general reserve was decreased to Ft47.17 billion instead of the earlier Ft51.5 billion. The pensions fund remains in balance; both the revenue an income side is at Ft2,999 billion while the social insurance is calculated with a Ft8.8 billion deficit.
According to the Maastricht criteria the deficit can be only 2.6% of the GDP, which means that Hungary will fulfill the conditions necessary to enter the eurozone.
The restriction proposed by János Veres, Financial Minister decreased the expenses by Ft400 billion compared to the October version of the budget.
On the other hand, during the planning of the 2009 budget, the government counted on a GDP drop of 1%, a 4.5% inflation, and more than 3%retail consumption decrease. These parameters now seem to be incorrect, as inflation is likely to be lower, while the contraction of the economy is likely to be stronger than the government assumed. As a protection against such threats the budget includes reserves but a part of that has already been spent as the government decided to partially compensate public sector workers for the taking away of their 13th month salary.

The BpSun Staff

17.12.2008