The deficit has thus reached 17% of the HUF 1.1664 trillion full-year target, MTI-Econews calculated.

The central budget had a HUF 168.6 bln deficit and the social insurance funds were HUF 45.9 bln in the red at the end of March. Separate state funds ran a HUF 16.4 bln surplus.

The ministry noted that the deficit exceeded the HUF 125.8 bln gap in the base period, but said it was “in line with expectations.” Higher wages – the result of an agreement reached between the government, employers and unions late last year – boosted payroll tax revenues, it added. Budget revenues were also lifted by one-offs, such as the sale of state-owned farm land, as well as remuneration for pre-financing of EU-funded projects.

The impact of VAT revenues on the general government balance was “more moderate” because of new rules shortening the deadline for VAT refund payments from 75 days to 45 days.

In the month of March alone, the general government ran a HUF 378.5 bln deficit, largely because of payouts of EU funding, the ministry said.

The deficit target of 2.4% of GDP for the full year remains “realistic” and “achievable,” which is “reflected in stable investor confidence,” the ministry added.