Seven-month deficit 61% of full-year target

Telco

Hungaryʼs cashflow-based general government deficit, excluding local councils, reached HUF 464.8 billion in the first seven months of 2016, shows a first reading of data released today by the Ministry for National Economy, according to Hungarian news agency MTI.

The deficit reached 61.0% of the full-year target of HUF 761.6 bln, Econews calculated. 

In July alone, the general government ran a HUF 62.7 bln deficit, compared to HUF 70.8 bln a year earlier. The central budget ran a HUF 585.8 bln deficit in the first seven months of the year, while social insurance funds and separate state funds had surpluses of HUF 52.5 bln and HUF 68.5 bln, respectively. 

The seven-month deficit was little more than half of the corresponding HUF 894.1 bln figure in 2015. 

The ministry attributed the drop in the deficit to lower central budget expenditures, including lower co-payments to EU-funded programs and lower debt servicing expenditure, as well as higher tax revenues resulting from favorable economic trends and government measures to whiten the economy. 

The ministry noted that the jobless rate, at 5.1%, is the lowest since 1989 and the number of employed, at 4.3 million, reached a peak in the same period, adding that a three-and-a-half year rise in real wages, tax reductions and low inflation supports growth in consumption.

The full-year deficit target of 2% of GDP, calculated according to EU accounting rules, "remains realistic and achievable," the ministry stated.

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