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Deficit reaches 51.2% of full-year target in August

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 510.8 billion deficit at the end of August, reaching 51.2% of the HUF 998.4 bln full-year target, the Ministry of Finance said in a preliminary release on Monday, state news wire MTI reported.

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 European Union-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, the ministry added.

Monthly family support payments for September were transferred in August, ahead of the start of the school year on September 1, adding an additional HUF 30.7 bln to expenditures during the month, the ministry noted.

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.