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2018 general deficit confirmed at 2.2% of GDP, under target

Hungaryʼs general government deficit - calculated according to EU accrual-based accounting rules - came to 2.2% of GDP last year, the Central Statistical Office (KSH) said Monday. Hungaryʼs government had targeted an ESA 2010 general government deficit of 2.4% of GDP.

In absolute terms, the deficit reached HUF 934 billion in 2018. The KSH said it has reported the data to Eurostat, the EUʼs official statistical agency.

The data show general government revenues rose 8.5% to HUF 18,617 bln in 2018, while expenditures rose 8.6% to HUF 19,551 bln.   

On the revenue side, taxes on production rose by 11.8%, or HUF 811 bln, while revenue from taxes on income grew by 2.5%, or HUF 72 bln. Social contributions were up by 5.0%, or HUF 243 bln. Other revenues were up 13.3%, or HUF 335 bln, mainly because of significant growth in EU transfers, the KSH said.

On the expenditure side, compensation paid to employees was up 5.7%, or HUF 238 bln, while social benefits other than social transfers in kind increased 4.7%, or HUF 218 bln. Gross fixed capital formation jumped by 39.7%, or HUF 693 bln, and other expenditures were up 13.3%, or HUF 435 bln.

The KSH noted that Hungaryʼs state debt, based on data from the National Bank of Hungary (MNB), stood at HUF 29,807 bln at the end of 2018, equivalent to 70.8% of GDP. The figure is down from 73.4% at the end of 2017.

Speaking at a press conference after the data were published, Minister of Finance Mihály Varga noted that Hungary had a primary surplus in 2018; that is, expenditures were less than revenues when excluding the cost of debt maintenance.

Interest expenditures came to HUF 1,066 bln in 2018. Hungary has had primary surpluses every year since 2012.

The governmentʼs deficit target for 2019 is 1.8% of GDP.