BUSINESS IN SHORT

Cabinet says deficit cut is achievable

THE FINANCE Ministry said that based on its preliminary data on this year's government finances, it believes the government’s target of a budget deficit of 4.9 percent of GDP is realistically achievable, the SITA newswire reported.

THE FINANCE Ministry said that based on its preliminary data on this year's government finances, it believes the government’s target of a budget deficit of 4.9 percent of GDP is realistically achievable, the SITA newswire reported.

The ministry, however, warned of several risks that might jeopardize this goal. The documents adopted by the cabinet on July 13 notes that these risks might be hidden in the general government budget in areas such as hospitals, railways and the Environmental Fund rather than in the state budget.

“The basic conclusion is that public finances have developed in accordance with the adopted budget,” Finance Minister Ivan Miklos said, as quoted by SITA. “There are some items which are worse; there are some items with better development. We want to genuinely fulfil the intention of consolidating public finances.”

The ministry wrote that the most problematic areas could increase the 2011 deficit by €460 million; revitalising the railway companies alone could increase the deficit by up to €230 million and health-care debt could increase it by €100 million. On the revenue side, €80 million is planned through the sale of emissions allowances and the ministry said that may not be entirely realistic.

The ministry also wrote that tax revenue might fall €48 million below the budget plan but that an additional €536 million might be saved by further spending cuts, SITA wrote.

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