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Hungary Q1 deficit 3.6% of GDP

Telco

Hungary had a general government deficit of HUF 256.6 bln or 3.6% of GDP in the first quarter of 2014, the Central Statistics Office (KSH) said, based on preliminary figures yesterday.

The deficit fell by HUF 31.3 bln or 0.4 percentage points of GDP from one year earlier as revenue rose more than expenditure did, KSH noted. The deficit rose from 0.9% of GDP in Q4 2013.

Q1 revenue rose 9.0% in one year to HUF 3,416.5 bln and expenditure rose 7.3% to HUF 3,673.1 bln. Both general government revenue and expenditure rose well over inflation or GDP growth in the period.

Production and import taxes increased 9.9% from a year earlier, including a sharp, 14.7% rise in VAT revenue. Revenue from social security contributions rose 9.5%. Revenue from income taxes rose 7.9%, while capital taxes fell 8.3%.

First quarter government expenditures, government investment spending rose a sharp 42.7% in connection of road and railway projects and the building of stadiums, KSH reported.

Spending on current government consumption rose a sharp 14.8%. Its share in total expenditure surpassed 15%.

Other expenditure, that includes production support and government transfers to other sectors as well as in-kind contributions, was up 10.9% in Q1. It reached 20.5% of the Q1 total.

Spending on wages increased 6.1%, and spending on current government consumption rose. 20.6% of all government spending was spent on wages.

With a fall of government securities yields, interest expenditures dropped 0.9% year-year and its share in total spending dropped slightly to 8.7%.

The figures were still calculated under the outgoing ESA95 methodology. EU member states has to adopt the revised European System of Accounts of the European Union, dubbed "ESA 2010", from September 2014.

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