General govʼt deficit at 70% of annual target by end of July, ministry confirms

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Hungaryʼs cash flow-based general government, excluding local councils, ran a deficit of HUF 816.82 billion in the first seven months of 2017, representing 70.0% of the full-year target, the Ministry for National Economy confirmed in a second reading of data on Monday.

The figures are unchanged from the preliminary ones released on August 7, state news wire MTI reported.

The deficit has thus reached 70.03% of the HUF 1,166.4 bln full-year target, MTI calculated earlier.

In July alone, the central government ran a HUF 94.4 bln surplus, compared to a monthly deficit of HUF 62.7 bln a year earlier.

The state of general government finances is "stable" and the deficit target of 2.4% of GDP for the full year, calculated according to EU accounting rules, "can be safely achieved," the ministry added.

The central budget ran a HUF 843.7 bln deficit and the social insurance funds were HUF 81.8 bln in the red at the end of July. The separate state funds had a HUF 108.7 bln surplus.

The seven-month deficit was HUF 378.9 bln up from one year earlier.

January-July central budget revenues, at HUF 6,687 bln, stood at 55.9% of the full-year target and were up 19.2% year-on-year. Expenditure, at HUF 7,531 bln or 57.2% of the target, rose by 17.8% year-on-year.

The ministry said the deficit was lifted by advance payouts of European Union funding from national coffers, adding that such payouts reached HUF 1,090 bln in the first seven months this year, as against HUF 601.7 bln a year earlier.

The ministry also mentioned home construction subsidies, which were up by more than a third in one year as another factor. At nearly HUF 90 bln, these fell behind the time-proportionate value, reaching 42.5% of the full-year target.

On the revenue side, the balance was lifted by personal income and payroll tax as well as by the HUF 146.7 bln in revenues arriving from last yearʼs state-owned land sales.

January-July net central budget revenue from personal income was up 10.6%, while net revenue from VAT rose by 8.3%, but both fell somewhat short of the yearly target.

Excise duty revenue rose just 0.8% year-on-year and was slightly above the time-proportionate plan. The ministry noted a 11.1% rise in revenue from road e-tolls, to HUF 96.7 bln.

Funding arriving from the European Union to central budget chapters related to the current EU budgetary period rose by 28.4% to HUF 194.2 bln, but was just 12.6% of the more-than-doubled full-year target. The ministry said the delay will be made up for in the second half.

EU monies coming in as retroactive payouts of EU support were HUF 44.5 bln, or 51.3% of the annual plan, after hardly any such payouts one year earlier.

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