General government deficit reaches 108.8% of full-year target in November


Hungaryʼs cashflow-based general government deficit, excluding local councils, reached HUF 970.7 bln at the end of November, the National Economy Ministry said today, confirming a first reading of data released on December 7.

The deficit reached 108.8% of the HUF 892.4 bln full-year target.

The ministry noted that the deficit rose from just HUF 713.7 bln in the base period and attributed the difference to "disparate developments" related to European Union funding. "Till now, the budget has transferred more than HUF 500 bln of higher payments in the interest of ensuring the implementation of domestic developments and avoiding a possible loss of resources," it reiterated.

On the other hand, eleven-month tax revenues rose about HUF 665 bln year-on-year, the ministry said, attributing the increase to the performance of the Hungarian economy and to government measures to "whiten" the economy.

The full-year ESA deficit goal, calculated according to EU methodology, is an unchanged 2.4% of GDP, could still realistically be met, and the actual deficit could be even below the target, the ministry said.

Eleven-month central budget revenues, at HUF 10,242 bln, stood at 92.9% of the full-year target, over the pro-rata 91.7%, while the ratio was 95.1% for budget expenditures which reached HUF 11,281 bln.

In January-November, the central budget ran a HUF 1,038.5 bln deficit, 23.4% more than the annual target. The social security funds, planned to break even in the full year, ran an eleven-month surplus of HUF 45.8 bln. And separate state funds had a surplus of HUF 22 bln as against a planned annual shortfall of HUF 51 bln.

Revenue from nearly all main taxes was at or above the pro-rata target. VAT, at HUF 2,931 bln or 91% of the full-year target was an exception, with some shortfall compared to the recently upward revised annual plan. Excise duty revenue, in contrast stood at HUF 907 bln by the end of November, reaching 95.3% of the full-year target.

Corporate tax revenues, at HUF 317 bln in eleven months, reached 92.8% of the target and were up by more than a third in one year, reflecting higher profits and less refunds, among others, the ministry said.

In November alone, the central government had a deficit of HUF 154.5 bln against a HUF 95.9 bln surplus one year earlier. The ministry attributed the rise to the fact that the central budget disbursed nearly HUF 494 bln related to the financing of EU programmes, HUF 280 bln more than a year earlier as the end of the 2007-2013 period payouts approached. At the same time, it received a high HUF 304 bln in EU funding last month, nearly 50% more than a year earlier as funds halted in the spring and released late September arrived.

With the EU funds suspension lifted and big transfers made both in October and November, project-related eleven-month budget revenue from the EU was HUF 1,036 bln, still more than HUF 200 bln under the same period last year and almost HUF 700 bln or 40% short of the annual target.

Meanwhile, the government paid out HUF 2,403 bln in European Union funding to successful applicants in January-November, about 30% more than in the same period a year earlier. The eleven-month payments reached 95.8% of the full-year target. This yearʼs payments were targeted to rise by almost 14% as all payouts for the 2007-2013 EU budget period must be completed by the end of the year.

The sale of a 5% state stake in OTP generated nearly HUF 75 bln in November. State revenue related to state assets almost doubled as a result to HUF 147 bln, but still was only 40% of the full-year target.

Among the big expenditure items, interest spending in January-November was HUF 1,107 bln, down by HUF 135 bln in one year and reaching 99.5% of the full-year target.

Spending on fostered work schemes reached HUF 229 bln, just 84.7% of a high annual target. Full-year spending is targeted to rise almost 20% to HUF 270 bln.

Support for local councils came to HUF 595 bln or 90.8% of the annual plan and down HUF 27 bln from the same period a year earlier. Their full-year support is to drop 10% from 2014.


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