HUNGARY - Hungary would use excess budget income from private pension portfolios returning to the state to reduce government debt, said Gyorgy Naszvadi, a state secretary in the Economy Ministry.
The government drafted the 2011 budget with a plan to attract 530bn forint ($2.7bn) worth of assets from the pension funds, which will go toward cutting the budget deficit, Naszvadi told reporters in Budapest.
Additional income may also narrow the shortfall if the European Union maintains the current methodology for deficit calculation, he said. The government estimates that at least 40% of the 2.8trn forint held in the funds will return next year, according to Naszvadi.
The government plans to sell the assets in the pension portfolios "gradually" to avoid market "disturbance," Naszvadi said.
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