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Gen Gov't Deficit at HUF 2.896 tln in June

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Hungary's cash flow-based general government balance reached HUF 2.896 trillion at the end of June, the Finance Ministry confirmed in a detailed release of data on Monday.

The central budget deficit reached HUF 2.908 tln at the end of June and the social security funds were HUF 78.1 billion in the red. Separate state funds had a HUF 90.4 bln surplus.

Alone in the month of June, the deficit was HUF 132.7 bln, the narrowest June gap in eight years, the ministry said.

The ministry noted that expenditures related to the regulated utility price scheme for households came to HUF 969.2 bln by the end of June.

Expenditures on home subsidies reached HUF 330.7 bln in January-June, climbing by HUF 60.2 bln from the base period.

"During wartime, the government's primary goal is the defense of families and workplaces, and preserving the value of pensions. The budget ensures the necessary resources, while the government continues to improve balance indicators," the ministry said.

The full-year deficit target is HUF 3.4 tln. The deficit reached HUF 4.753 tln in 2022.

The detailed report shows net revenue from VAT edged up 2.2% to HUF 3.328 tln in January-June from the same period a year earlier.

Net revenue from personal income tax reached nearly HUF 1.916 tln. In the base period, the balance was just HUF 1.03 tln because of a tax refund for parents raising children.

Payouts for European Union programs came to HUF 1.461 tln in January-June, while transfers from Brussels for those programs reached just HUF 754.7 bln.

Hungary's government has been pre-financing EU-supported investments for years, a practice that impacts the cash flow-based deficit, but not the accrual-based deficit calculated according to EU accounting rules.

The data show net interest expenditures came to HUF 1.174 tln in January-June, HUF 461.5 bln more than in the same period a year earlier.

Central budget debt rose by HUF 2.365 tln, lifted by HUF 1.908 tln of net forint issues and HUF 1.613 tln of net FX issues. The stronger forint reduced the debt by HUF 943.2 bln.

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