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Ministry: July government deficit lowest in 15 years

Telco

Hungaryʼs cash flow-based general government deficit, excluding local councils, reached HUF 464.8 billion at the end of July, the lowest deficit for that month in 16 years, the Ministry of National Economy confirmed in a second reading of data released today. The deficit is at 61% of the full-year target, the ministry said.

The central budget ran a HUF 585.8 bln deficit, while social insurance funds and separate state funds had surpluses of HUF 52.5 bln and HUF 68.5 bln, respectively, the ministry said.

By comparison, January-July 2015 figures showed a deficit of HUF 894.1 bln. The ministry attributed the difference between January-July 2016 vs 2015 to the beneficial effects of the real economy: higher tax income from the whitening of the economy and different central budget spending allocations. 

According to the Economy Ministry:

  • Total revenue for January-July 2016 was HUF 9,183 bln, expenditure amounting to HUF 9,648 bln compared to HUF 9,122 bln and HUF 10,016 bln respectively for January-July 2015.
  • Corporate tax income in January-July was HUF 285.1 bln, up by HUF 79.1 bln compared to the first seven months of 2015. Income from value-added tax stood at HUF 1,775.1 bln, up by HUF 35.1 bln. Income from excise tax at HUF 557.1 bln was also up by around HUF 23.7 bln.
  • On the expenditure side, chapter-based allocations related to European Union spending this year were markedly lower than last year. Social security expenditures were also down as were interest payments related to debt servicing and contributions to the EU budget.
  • In 2016, for the month of July alone, the general government had a HUF 62.7 bln deficit compared to a HUF 70.8 bln deficit in the same period a year earlier.
  • The governmentʼs 2.0%-of-GDP target for the full-year deficit, calculated according to EU accounting rules, is "realistic and achievable", the ministry stated.

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