Hungary will cut its national debt by 4 percentage points to 73 per cent of gross domestic product (GDP) in coming months, dpa quoted Prime Minister Viktor Orban as telling reporters after a cabinet meeting Tuesday. Government debts due to mature in October and November will be paid off - mainly with 3 billion euros (4.21 billion dollars) deposited at the Hungarian National Bank. This sum is an unused part of an International Monetary Fund loan granted in 2008, when Hungary became the first European Union member to seek an international rescue amid the global financial crisis, the state news agency MTI reported. A remaining 1 billion euros of the maturing debt will be paid using the proceeds of the transfer this year of formerly compulsory private pension funds to the state. Another portion of this windfall - which was worth almost 3 trillion forints (15 billion dollars) - had already been used to cut the national debt from 81 to 77 per cent. Economy Minister Gyorgy Matolcsy - speaking alongside the prime minister, announced hikes in taxes on alcohol, tobacco, gambling and petrol and diesel. The move is aimed at filling an expected 100-billion-forint hole in the 2011 budget, after disappointing second-quarter economic growth figures forced the government to revise its 2011 forecast downwards from 3.1 per cent. Matolcsy said the economy ministry's official forecast is now for a mere 2-per-cent growth in both 2011 and 2012.
