Hungary passes 2012 austerity budget

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BUDAPEST, Dec 20 (AFP): Hungary's parliament approved Tuesday the country's 2012 austerity budget, targeting a public deficit of 2.5 per cent of gross domestic product (GDP) as the country seeks IMF support. The budget projects 2012 revenues of 14.3 trillion forints (47.2 billion euros, $61.4 billion) and spending of 14.9 trillion forints, leaving a shortfall of 576.2 billion forints. Prime Minister Viktor Orban's government said that Hungary would thereby be one of just seven European Union member states to achieve a deficit below the EU ceiling of three per cent of GDP. The budget is based on predictions of 0.5-per cent GDP growth, a forint-euro exchange rate of 299.4 forints and average inflation of 4.2 per cent-forecasts which many experts see as optimistic. To fill the gap caused by the forint's fall and lower growth, the government plans to unlock a a 200-billion-forint reserve and to reallocate 48 billion from private pension funds into state coffers.