The Hungarian government's goal of trimming the budget deficit to 2.8% of GDP by 2005 is "a considerable, but not impossible challenge"

The Hungarian government's goal of trimming the budget deficit to 2.8% of GDP by 2005 is "a considerable, but not impossible challenge", the OECD said in its latest Economic Outlook, published yesterday. Substantial expenditure cuts will be necessary, as the scope for tax increases has been exhausted, the report advised. For successful entry into the euro zone, planned for January 2008, Hungary needs consensus and coordination on macroeconomic policy, the OECD said. The OECD predicted a budget deficit of 5.2% for 2003, compared to Hungary's forecast of 4.9%, and put the budget gap at 4.3% in 2004. GDP growth in Hungary will rise to 4% in 2005 and become better balanced, OECD projected. (Econews, Vg 1, Nv 5)