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Deficit reaches 87% of full-year target in May

Hungaryʼs cash flow-based general government, excluding local councils, ran a deficit of HUF 1,187.5 billion at the end of May, the Ministry of Finance said in a preliminary release of data on Thursday. The deficit has thus reached 87.27% of the HUF 1,360.7 bln full-year target, state news wire MTI calculated.

The central budget deficit reached HUF 1,243.2 bln and separate state funds were HUF 1.2 bln in the red. However, the social insurance funds had a HUF 56.9 bln surplus.

In May alone, the general government deficit came to HUF 106.1 bln, similar in value to the monthly deficit in May 2017.

The ministry said budgetary finance trends for January-May remained unchanged from the previous months. It noted that pre-financing for EU-funded projects reached HUF 993.1 bln by the end of May, around double the amount compared to the corresponding period of 2017, while transfers from Brussels came to just HUF 63.9 bln.

Expenditures were also lifted by spending on central budget-funded projects, such as the Modern Cities Program, Healthy Budapest Program, and priority road and infrastructure investments, it added.

In the first five months of the year, budgetary revenues from VAT and personal income tax were up HUF 62 bln and HUF 107.2 bln, respectively, from the corresponding period a year earlier, while payroll tax revenue climbed by HUF 120.9 bln due to rising employment and real wages.

The government is standing by its full-year deficit target of 2.4% of GDP, assuming GDP growth of over 4%, the ministry said.