Hungary may achieve a cyclically-adjusted fiscal surplus in 2010, assuming no pre-election back-pedalling from the fiscal tightening next year, Merrill Lynch said in the analysis. The headline fiscal deficit, projected at 3.9pc of GDP in 2009 and 2010, masks the sharp underlying fiscal tightening as it ignores the severe cyclical downturn, the report explained. The OECD puts Hungary’s output gap at negative 11pc of potential GDP in 2010 – the largest among the OECD economies. Overall, this means that Hungary may have a balanced headline budget once the economy rebounds, assuming no changes in fiscal policy, Merrill Lynch said.