The deficit swelled during the month as the government stocked up on medical supplies and rolled out measures to cushion the impact of the coronavirus pandemic on the economy.
Measures the government has taken so far to contain the spread of the novel coronavirus and protect the economy, such as a moratorium on repayments of corporate and retail loans and support for sectors of the economy hardest hit by the pandemic, “have impacted the revenue and expenditure sides of the budget to a significant degree”, the ministry said.
The ministry noted that government expenditures on procurements of personal protective equipment and ventilators came close to HUF 190 billion in March.
“The most important task of the Hungarian government is managing the impact of the coronavirus pandemic. After the protection of life, an important task is jump-starting the economy, preserving and creating jobs, and strengthening the positions of families and businesses. All measures serve these goals, thus the budget must ensure the resources necessary for the fight against the pandemic and the economic protection plan,” the ministry said.
The central budget deficit reached HUF 746.7 bln at the end of March and the social insurance funds were HUF 86.9 bln in the red. Separate state funds had a surplus of HUF 1.7 bln.
On the revenue side, VAT payments were up HUF 90.3 bln from the base period, PIT revenue rose HUF 55 bln and corporate tax revenue climbed HUF 37.9 bln. VAT revenue stood at 22.7% of the full-year target, PIT revenue at 24.1%, and revenue from payroll taxes at 24.2%.
The ministry noted that government efforts to pre-finance European Union-funded projects continued to impact the budget: while payouts for such projects came to HUF 691.2 bln by the end of March, transfers from Brussels reached just HUF 63.4 bln.
The government earlier announced that Hungaryʼs ESA general government deficit target for 2020 would be raised from 1% of GDP to 2.7% because of the pandemic.
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