Hungary Finance Ministry says budget deficit could be 7%-9% of GDPChristian Fernsby ▼ | August 25, 2020
Based on the slower-than-expected performance of the economy in the second quarter and the new economic protection measures planned, the budget deficit could be 7-9% of the gross domestic product, the Ministry of Finance announced in a statement, according to portfolio.hu.
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In other words, the general government deficit as a share of GDP is basically raised to such a high level by three factors: direct costs of combating the epidemic, economic recovery measures to offset the economic effects (both past and planned), the economic downturn, which raises the deficit target by keeping the level of GDP lower than expected through the denominator effect. ■