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General gov’t deficit reaches 59.7% of full-year target by end-May

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Hungary's cashflow-based general government deficit, excluding local councils, reached HUF 344.1 billion at the end of May, or 59.7% of the full-year target, the National Economy Ministry said on Thursday

The general government ran a HUF 115.9 billion deficit in the month of May. The central budget gap came to HUF 132.6 billion and the separate state funds had a HUF 7.4 billion deficit, but the social insurance funds had a HUF 9.3 billion surplus last month.

Adjusted for one-off items, the ministry said the deficit came to HUF 345.8 billion at the end of May, or 37.7% of the full-year target. In the five months to the end of May, the central budget deficit reached HUF 403.6 billion and the gap in the social funds came to HUF 2.3 billion, but the separate state funds had a surplus of HUF 61.8 billion.
The central budget deficit widened by more than HUF 90 billion in May from a year earlier as central budget revenues rose almost HUF 97 billion and central budget expenditure rose nearly HUF 190 billion yr/yr. The revenue rise mainly reflected rising tax revenues, the ministry said, citing increased revenues from corporate tax, the tax on company cars, VAT, excise duties and personal income tax. Tax hikes explain part of the rise.
The rise in central budget expenditure reflected support disbursed to rail transport, the reshuffling some expenditure between the budget and the National Family and Social Policy Fund, higher interest expenses and contributions to the EU, the ministry said. Interest rate expenses were HUF 62.0 billion in May, up HUF 22.9 billion yr/yr, and interest revenues rose HUF 7.8 billion to HUF 16.6 billion.
Among the social insurance funds the National Pension Fund posted a HUF 5.9 billion and the Health Fund a HUF 3.4 billion in May. The combined surplus, standing against a HUF 24.4 billion deficit a year earlier, mainly reflected a rise in social security contributions, new taxes (the accident and the chips tax) and a HUF 8.5 billion central budget support to the Pension Fund in May against no support in May last year.
The HUF 5.5 billion higher surplus of the separate state funds reflected HUF 4.3 billion higher revenues and HUF 3.5 billion higher spending than in May 2011.
The National Employment Fund received more revenue from training contributions and the Bethlen Gábor Fund, promoting links and support to Hungarians in neighboring countries received central budget funding in May, the ministry said. Spending by the same fund rose compared to May 2011 as did "other spending" by the National Employment Fund.

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