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Ministry confirms HUF 1.418 tln deficit at end of October

Telco

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 1.418 trillion deficit at the end of October, the Ministry for National Economy confirmed in a second reading of data released yesterday.  The deficit has thus reached 121.6% of the HUF 1.166 tln full-year target.

The central budget had a HUF 1.491 tln deficit and the social insurance funds were HUF 49 billion in the red at the end of October 2017. Separate state funds ran a HUF 122.7 bln surplus. In the month of October alone, the general government ran a HUF 181.9 bln deficit.

Total revenue for January-October 2017 was HUF 14.538 tln and expenditure was HUF 15.956 tln. This compares to figures of HUF 13.978 tln and HUF 13.920 tln, respectively, in January-October 2016. (The central government thus had a HUF 57.3 bln surplus in the first ten months of the base period.)

The ministry said the ten-month deficit this year was lifted by advance payments of European Union funding. The advances from the budget added up to HUF 1.702 tln during the period, while EU transfers came to just HUF 326 bln, it explained.

The ministry added that revenues from payroll tax, VAT, personal income tax and healthcare contributions were up because of higher employment.

Revenue from personal income tax was up HUF 166.5 bln at HUF 1.580 tln. Higher wages helped lift revenue, the ministry said.

Corporate tax income in January-October was HUF 372.3 bln, down by HUF 53.3 bln compared to the first ten months of 2016. Income from VAT was HUF 2.801 tln, up by HUF 194.9 bln. Income from excise tax, at HUF 837.7 bln, was up around HUF 5.6 bln. 

Income from the financial transaction duty was up HUF 12 bln at HUF 179.2 bln, while income from the extraordinary bank levy was down at HUF 53.1 bln from HUF 55.1 bln earlier.

"The governmentʼs fiscal policy continues to be characterized by predictability and stability, and revenues and expenditures are progressing as planned," the ministry said.

The governmentʼs deficit target of 2.4% of GDP  for the full year, calculated according to EU accounting rules, is safely achievable, the ministry asserted.

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