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Deficit cut to 109.9% of full-year target in September

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 1,496.5 billion deficit as of the end of September, the Ministry of Finance said in a preliminary release on Monday. The deficit thus corresponded to 109.9% of the HUF 1,360.7 bln full-year target, state news wire MTI calculated.   

The central budget deficit reached HUF 1,542.9 bln, while separate state funds had a HUF 24.4 bln surplus and social insurance funds a HUF 22.0 bln surplus.

In September alone, the general government surplus came to around HUF 149.8 bln. As a result, the deficit declined from HUF 1,646.2 bln at the end of August, then 121% of the full-year target.

In the first nine months of the year, budgetary revenues from VAT and personal income tax were up HUF 377.9 bln and HUF 188.5 bln, respectively, from the corresponding period of 2017, while payroll tax revenue climbed by HUF 205.3 bln. Income from excise tax was up HUF 77.3 bln over the same period.

In September, transfers from the European Union totaled HUF 157.9 bln, pushing revenues from the EU for the first nine months to HUF 341 bln. The Ministry of Finance said an additional several hundred billion forints could be transferred from the EU by yearʼs end.

On the expenditures side, domestic and EU-funded developments continue to entail significant obligations, for example with regard to the Modern Cities Program and Healthy Budapest Program.  

The ministry noted that the Hungarian economy is on a balanced and dynamic growth path, demonstrated in the 4.9% GDP growth in the second quarter of the year. This, it claimed, has been achieved mostly by the economic policies of the government, such as boosting employment and whitening the economy.

With increasing budgetary revenues, the deficit target for the full year of 2.4% of GDP, calculated using EU accruals-based accounting rules, is achievable, parallel with economic growth over 4%, the ministry concluded.