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Deficit 14.2% of full-year target at end of March

Hungaryʼs general government, excluding local councils, ran a HUF 141.9 billion deficit at the end of March, the Ministry of Finance said in a preliminary reading of data on Monday. The deficit thus reached 14.2% of the HUF 998.4 bln target for the full year.

The central budget was running a HUF 139.6 bln deficit at the end of March, while the social insurance funds were HUF 3.7 bln in the red. Separate state funds had a surplus of HUF 1.4 bln, state news wire MTI reported.

The ministry said the general government balance was shaped in the first quarter by economic trends, tax cuts, higher budget revenue and large-scale development funding from the government and the European Union.

It noted that revenue from VAT rose HUF 305.4 bln, revenue from personal income tax climbed HUF 41.2 bln, revenue from payroll tax increased HUF 64.1 bln, and revenue from excise tax was up HUF 28.1 bln from the corresponding period a year earlier.

Pre-financing for EU-funded investments continued to impact the balance, the ministry said. Payouts for such investments reached HUF 344.3 bln during the period, while transfers from Brussels came to just HUF 283.7 bln. 

Government funding for developments in the framework of the Modern Cities Program, railway upgrades and efficiency improvements at businesses were also higher than in the base period, it added.

The full-year accrual-based deficit target of 1.8% of GDP is achievable, parallel with a reduction in state debt, the ministry said.