The Hungarian Central Statistical Office (KSH) has submitted Hungary’s EDP report to the statistical body of the European Commission. The Ministry for National Economy is prognosticating a lower-than-expected general government debt-to-ratio of 76.9 percent, 2.9 percent budget deficit and economic growth of 3.1 percent for 2014. For 2013, GDP increase was revised up from 1.1 percent to 1.5 percent.

As of September 2014, deficit and debt data have been calculated in accordance with ESA2010, a new statistical method. The European System of Accounts as a statistical method aim for comparability between EU member states and the system is usually revised every 8-10 years. Within the European Union, excessive deficits are evaluated by the method’s indicators.

According to national accounts data calculated in line with ESA2010 and published by KSH, in 2013 Hungary’s GDP at current prices was HUF 29 846bn, up by HUF 768bn or 2.6 percent in comparison to the formerly published figure of HUF 29 078bn, which was calculated in accordance with the former method. As a result, real GDP growth in 2013 was 1.5 percent, 0.4 percentage points higher than the former 1.1 percent figure. GDP growth is estimated to be 3.1 percent in 2014.

The ESA 2010 deficit indicator fell to 77.3 percent of GDP by the end of 2013 from 78.5 percent at the end of the previous year. This trend is expected to continue and this indicator is seen to improve to 76.9 percent in 2014.

The deficit-to-GDP ratio for 2013 reported in spring 2014 edged up from 2.2 percent to 2.4 percent, due mainly to the new accounting of swaps. Another change in general government budget deficit was caused by the modified calculation of the assets received from private pension funds, which have to be accounted – contrary to the former practice -- not as one-off revenues but spread over a longer period and linked to the pension expenditures for people returning to the state social insurance system.

Despite methodology changes, the 2.9 percent deficit target for 2014 is achievable. Hungary’s monitoring and prognosticating systems are working properly, and fiscal regulation and accounting effectively underpin the management of fiscal processes.

(Ministry for National Economy)