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Deficit confirmed at 51.2% of full-year target for August

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 510.8 bln deficit at the end of August, reaching 51.2% of the HUF 998.4 bln full-year target, the Ministry of Finance confirmed in a second, more detailed reading on Monday.   

The central budget ran a HUF 589.3 bln deficit at the end August, while the social insurance funds were HUF 3.3 bln in the red. Separate state funds were HUF 81.8 bln in the black.

Alone in the month of August, the general government ran a HUF 158.0 bln deficit.

The Ministry of Finance noted that pre-financing for EU-funded projects continued to impact the central budget in January-August: payouts for those projects came to HUF 952.5 bln during the period, while transfers from Brussels reached just HUF 467.3 bln.

Expenditures were also affected by state funding for investments undertaken in the framework of the Modern Cities Program and the Hungarian Village Program, road and railway upgrades, and incentives for business investments that boost productivity.

On the revenue side, revenue from VAT reached 67.7% of the full-year target by the end of August, while revenue from personal income tax stood at 67.0%, and revenue from payroll tax was 65.8% of the full-year target.

The ministry said the full-year deficit target of 1.8% of GDP, calculated according to the EUʼs accrual-based accounting rules, continues to be achievable.

More details released

Central budget expenditures came to HUF 13.968 trillion in January-August, reaching 67.9% of the full-year target. Revenues reached HUF 13.457 tln, 68.7% of the target for the whole year.

VAT revenue totaled HUF 2.903 tln for the period, up HUF 463.7 bln from the corresponding period a year earlier. Revenue from excise tax rose HUF 56.0 bln to HUF 758.2 bln, lifted by higher taxes and sales of tobacco products. Revenue from personal income tax climbed HUF 150.1 bln to HUF 1.582 tln, supported by wage growth.

Corporate tax revenue grew by HUF 32.8 bln to HUF 150.6 bln. Revenue from the financial transaction duty rose 4.9% to HUF 161.6 bln, while revenue from the extraordinary bank levy was up 11.6% at HUF 29.2 bln.

On the expenditure side, subsidies for families fell HUF 4.0 bln to HUF 298.8 bln. Subsidies for home purchases fell HUF 2.1 bln to HUF 119.6 bln. Support for local councils was up HUF 23.5 bln at HUF 728.9 bln.

Net interest expenditures fell HUF 91.5 bln to HUF 413.0 bln as a result of the timing of redemptions and higher interest income.