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Deficit 39% of full-year target, ministry confirms

Hungaryʼs cash flow-based general government, excluding local councils, ran a deficit of HUF 390 billion, or 39.1% of the HUF 998.4 bln full-year target, as of the end of June, the Ministry of Finance confirmed in a detailed release of data on Monday.   

The central budget deficit reached HUF 467.3 bln, while the separate state funds and social insurance funds had surpluses of HUF 61.0 bln and HUF 16.3 bln, respectively, state news agency MTI reported.

Revenue from personal income tax rose HUF 105.4 bln over the corresponding period a year earlier, while revenue from payroll tax climbed HUF 260.1 bln in the period. Revenue from VAT was HUF 397.4 bln higher, while excise tax revenue increased HUF 45.3 bln.   

Revenue was lifted by higher wages and employment, which, together with tax preferences, have boosted consumption, the ministry said. Government measures to improve tax compliance were also a factor, it added.

The government continued to pre-finance European Union-funded projects, paying out HUF 710.6 bln to recipients, while EU transfers came to HUF 346.6 bln for the period. The funding supported projects undertaken within the framework of the Modern Cities Program, railway upgrades, tourism investments, and efficiency-boosting capital expenditures at businesses. 

The deficit target of 1.8% of GDP for 2019, calculated using the EUʼs accrual-based methodology, is "realistic and achievable," the ministry said.

"The general government is characterized, as before, by stability and growing revenues as a result of the disciplined budgetary policy of the government and favorable economic processes," it added.