Hungary's Finance Minister said Hungary will be able to cut its budget deficit to below the European Union's ceiling of 3 per cent of gross domestic product by 2008 as agreed with the bloc.
Janos Veres Hungary's Finance Minister
Responding to EU concerns that Hungary was not keeping its budget deficit under control, Janos Veres said fiscal tightening will take place, but that it should not jeopardise economic growth.
"As I see it today, we will be able to reach the target by 2008 according to our pace, to lower the deficit to below 3 per cent in three years," he said.
"While we keep growth increasing, the decrease of deficit will take place in Hungary," he added.
Mr Veres said that Hungary's target of joining the euro zone in 2010 was still within reach but confirmed his prime minister's statement that the goal would be reassessed by December.
"Hungary will meet (euro zone entry) criteria in 2008 and could join (the euro zone) in 2010," he said.
The deficit of below 3 per cent of GDP is a key criterion for adopting the euro. It must be met two years before joining the euro zone.
Mr Veres blamed a recent sharp upwards revision of Hungary's 2005 budget deficit on a decision by EU statistical agency, Eurostat, which said the country cannot exclude spending on motorway construction from public accounts.