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General gov’t deficit reaches 52.8% of full-year target in June

Telco

Hungary’s cash flow-based general government deficit, excluding local governments, reached HUF 402.1 billion at the end of June, 52.8% of the full-year target, the National Economy Ministry confirmed in a second reading of data released today, Hungarian news agency MTI reported.

The central budget ran a HUF 514.9 bln deficit, while the social insurance funds and separate state funds had surpluses of HUF 47.2 bln and HUF 65.6 bln, respectively. The ministry noted that the deficit was less than half of the figure in the corresponding period a year earlier, attributing the difference to lower expenditures and higher tax revenue resulting from favorable economic trends and a crackdown on tax evasion. 

For the month of June alone, the general government had a HUF 388.9 bln deficit. Expenditures were higher than in previous months because of interest payments related to debt servicing and payouts for European Union programs as the 2014–2020 funding cycle gathers momentum, the ministry said.

The data show net interest expenditures reached HUF 560.7 bln in January–June, up HUF 27.8 bln year-on-year. Payouts for EU programs came to HUF 467.4 bln in the first half, including HUF 196.7 bln in the month of June alone.

The government’s target of 2% of GDP for the full-year deficit, calculated according to EU accounting rules, is “realistic and achievable,” the ministry asserted. The ministry also stressed again that the UK’s decision to leave the EU would not require any amendments to either this year’s or next year’s budget.

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