Deficit 87% of full-year target, ministry confirms


Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 1,187.5 billion deficit at the end of May, the Ministry of Finance confirmed in a second reading of data released Wednesday.  The deficit thus reached 87.3% of the HUF 1,360.7 bln full-year target.   

Confirming preliminary figures released on June 7, the central budget deficit reached HUF 1,243.2 bln and separate state funds were HUF 1.2 bln in the red, while the social insurance funds had a HUF 56.9 bln surplus.

In May alone, the general government deficit came to HUF 106.1 bln, similar in value to the monthly deficit in May 2017.   

The ministry said budgetary finance trends for January-May remained unchanged from previous months. It noted that pre-financing for EU-funded projects reached HUF 993.1 bln by the end of May, around double the amount compared to the same period last year, while transfers from Brussels came to just HUF 63.9 bln.

Expenditures were also lifted by spending on central budget-funded projects, such as the Modern Cities Program, Healthy Budapest Program, and priority road and infrastructure investments.   

In the first five months of the year, budgetary revenues from VAT and personal income tax were up HUF 62 bln and HUF 107.2 bln, respectively, from the corresponding period a year earlier, while payroll tax revenue climbed HUF 120.9 bln on rising employment and real wages. 

Total revenues for the first five months of 2018 were HUF 7,456 bln, while total expenditures were HUF 8,643 bln (compared to respective figures of HUF 6,978 bln and HUF 7,191 bln in the corresponding period of2017).

Corporate tax income in January-May was HUF 98.7 bln, down by HUF 177.4 bln compared to the first five months of 2017 due to the carry-on effects of tax advance supplement provisions from last year and reduced revenue from the growth tax credit.

Income from excise tax, at HUF 400.5 bln in January-May, was up by around HUF 34.9 bln year-on-year.  Income from the duty on financial transactions was up HUF 5.5 bln at HUF 95.2 bln, while income from the extraordinary bank levy was HUF 10.92 bln for the first five months.

The government is standing by its full-year deficit target of 2.4% of GDP, assuming GDP growth of over 4%, the ministry added.  

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