General gov’t runs HUF 213.4 bln deficit at end of May

Telco

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 213.4 billion deficit at the end of May, preliminary data released by the Ministry for National Economy today show, as reported by state wire service MTI-Econews.

The deficit thus reached 18.3% of the HUF 1,166.4 billion full-year target, MTI calculated.

The central budget had a HUF 180.1 bln deficit and the social insurance funds were HUF 85.9 bln in the red at the end of May. The separate state funds ran a HUF 52.6 bln surplus.

In May alone, the general government, excluding local councils, ran a HUF 91.1 bln deficit.

The five-month deficit was up from a HUF 13.2 bln deficit in the base period. 

Rising employment and consumption boosted by higher wages lifted budget revenues from VAT, personal income tax and payroll taxes, the ministry said. 

The ministry cited a rapid rise of investments, the expansion of the home purchase subsidy scheme for families (CSOK), and the effects of a six-year wage agreement reached between the government, employers and unions late last year, as well as the efficient utilization of EU funding available for 2014-2020, as factors behind the 4.2% growth posted in Q1. 

Budget revenues were also lifted by one-offs, such as the sale of state-owned farm land and the retroactive receipt of EU monies paid in advance to successful applicants by the central budget.

An amendment of the 2017 Budget Act before Parliament is aimed at modifying the budget in the light of recent government measures and gives extra funding to specific areas to further improve competitiveness, the ministry said. This will not, however, endanger either the meeting of the deficit target of 2.4% of GDP for the full year, or the further reduction of the state debt ratio expected by the end of the year, the ministry added.

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