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Hungary Postpones $2.3 Billion In Investments To Cut Budget Deficit

Prime Minister Viktor Orban's government said the measure was necessary to cut the 2022 budget deficit.

The Hungarian cabinet has deferred investments worth 755 billion forints ($2.3 billion) next year to reduce the budget deficit and bolster its finances amid warnings from the central bank about its fiscal discipline.

Nationalist Prime Minister Viktor Orban's government said the measure was needed to cut the 2022 budget deficit to 4.9 percent of gross domestic product from 5.9 percent targeted earlier.

Hungary's budget registered a record shortfall of 1 trillion forint ($3.06 billion) last month, prompted by a steep rise in pre-election spending as the latest opinion polls show the united opposition slightly ahead of Orban's Fidesz party in next year's general elections.

"Stimulating the performance of the Hungarian economy with public investments is no longer needed to the same extent," the Finance Ministry said in a statement on December 22.

Orban, who will face a closely fought election for the first time since 2010, said the moves would generate funds to finance other measures, such as a $2-billion tax rebate for families, scrapping income tax for career starters, and an extra month's worth of pensions next year.

Based on reporting by Reuters and AFP