BUDAPEST: Hungary's government announced on Monday another round of austerity measures in the form of tax hikes even though its economic and budgetary prospects are looking brighter.
The moves include raising a tax on financial transactions to 0.6 percent from 0.3 percent and a levy on financial transfers to 0.3 percent from 0.2 percent, Economy Minister Mihaly Varga said.
A telecoms tax was also increased to three forints (0.0069 euros, $0.0046) per phone call or text message from two forints, while the tax rate for mining companies moved up to 16 percent from 12 percent.
In May the European Commission proposed removing Hungary from its special budgetary monitoring procedure, where it has been since joining the European Union in 2004, after progress cutting its deficit.
"We are happy to exit the excessive deficit procedure, but we have to build on our achievements and look at the deficit long term," government spokesman Andras Giro-Szasz told reporters Monday.
Brussels last month lowered its forecast for the 2013 deficit to 2.7 percent of gross domestic product (GDP) and to 2.9 percent in 2014, under the EU limit of three percent.
In mid-May the right-wing government of Prime Minister Viktor Orban announced austerity cuts worth some 800 million euros including a freeze on spending, suspending certain investments and tax rises.
Markets have been concerned that such policies would hurt the economy, but Hungary exited recession in the first quarter, with growth of 0.7 percent outperforming many other emerging European economies.
Inflation, meanwhile, has eased from being one of the highest in the EU to a 39-year low of 1.7 percent in April, allowing Hungary's central bank to continue cutting rates.
Unemployment however remains high at close to 12 percent, direct foreign investment continues to fall, Hungary's credit rating is rated "junk" by the main agencies and bank lending remains weak.
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