Deficit over third of full-year target at end of February

Telco

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 526.6 billion deficit at the end of February, show preliminary data released Wednesday by the Ministry for National Economy. The deficit thus reached 38.7% of the HUF 1,360.7 bln full-year target, state news wire MTI-Econews calculated.

The central budget ran a HUF 599.5 bln deficit, while the social insurance funds were HUF 52.8 bln in the black at the end of February. Separate state funds also ran a HUF 20.1 bln surplus.

In February alone, the general government, excluding local councils, ran a HUF 333.8 bln deficit, calculated based on preliminary figures.

According to the ministry, advance payments on European Union funding made by the government reached HUF 492 bln in the first two months of 2018, compared to HUF 153.3 bln in the corresponding period of 2017. This significantly raised the deficit, since by the end of February the government had only received HUF 17.9 bln of EU development financing for the relevant projects.

Expenditures were also higher because of funding allocated for the Modern Cities program and the shorter deadline by which the tax office had to make tax rebates to "trusted taxpayers." The latter alone raised expenditures by HUF 200 bln.

The ministry said that in January-February revenues from personal income tax were 17% higher than in the base period because of favorable economic trends and government policies such as wage hikes for government employees and higher minimum wages.

The government still expects economic growth to be above 4% this year and the deficit to meet the target of 2.4% of GDP calculated according to EU accounting rules.

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