General government deficit slashed in year to August

Telco

Hungaryʼs cash flow-based general government deficit, excluding local councils, reached HUF 274 billion in the first eight months of 2016, a first reading of data released today by the Ministry for National Economy reveals, according to Hungarian news agency MTI.

The deficit reached 35.97% of the HUF 761.6 bln full-year target, MTI calculated. 

In August alone, the general government ran a HUF 190.8 bln surplus, compared to a HUF 20.8 bln deficit a year earlier.

The central budget ran a HUF 371.7 bln deficit in the first eight months of 2016, while the social insurance funds and separate state funds had surpluses of HUF 25.7 bln and HUF 72 bln, respectively.

The eight-month deficit this year was significantly below the HUF 914.9 bln deficit figure in 2015.

The ministry attributed the drop in the general government deficit to changes in European Union financing structures. Last year government co-payments to EU-funded programs raised expenditures, but this year EU contributions provided extra revenues of HUF 153.1 bln. Higher tax revenues resulting from government measures to whiten the economy also played a role.

Trends in the real economy, such as improving employment, higher real wages and higher consumption, are also contributing to the stability of the budget, the ministry added.

The full-year deficit target of 2% of GDP, calculated according to EU accounting rules, "can be reached safely," the ministry said.

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