Gen gov't surplus at HUF 198.8 bln in Jan

Debt

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Hungary's cash flow-based general government, excluding local councils, had a HUF 198.8 billion surplus at the end of January, the Finance Ministry confirmed in a detailed reading of data on Tuesday, according to a report by state news wire MTI.

The ministry said the January surplus is "not uncommon" and attributed it to seasonal effects.

The central budget had a HUF 180.5 bln surplus in January, while the separate state funds were HUF 22.4 bln in the black and the social insurance funds ran a deficit of HUF 4.1b ln.

The ministry said spending on pandemic defense measures came to HUF 60 bln in January, while expenditures on projects that are part of the Modern Cities Programme reached HUF 42 bln, and payouts for transport development projects came to HUF 23.8 bln.

The ministry also confirmed that the general government is expected to finish the year with a deficit equivalent to 6.5% of GDP, calculated according to the European Union's accrual-based accounting rules.

It said this year will be "fundamentally impacted" by the economic effects of the coronavirus pandemic.

"It is the government's aim to jump-start the Hungarian economy after the pandemic restrictions as soon as possible. Of key importance to this is the support of businesses, which is why the government is helping businesses with expedited, interest-free recovery credit in addition to investment incentive programs, tax reductions and payroll support," the ministry said.

"The budget will continue to ensure all of the resources necessary for pandemic defense and the economic recovery," it added.

The detailed report shows revenue rose 9.9% year-on-year to nearly HUF 2.255 trillion, while expenditures increased 4.8% to just over HUF 2.056 tln.

Revenue from VAT rose 8.9% to HUF 584.5 bln and revenue from excise tax increased 9% to HUF 107.4 bln. Revenue from personal income tax climbed 6.2% to HUF 267.2 bln.

On the expenditure side, payouts for European Union-funded programs reached HUF 258.9 bln, 16.2% of the full-year target. Pension payments increased by HUF 13.4 bln to HUF 315.4 bln, lifted by a 1.2% top-up because of higher-than-expected inflation in 2020 and a 3% annual pension increase from the start of 2021.

Central budget debt fell by HUF 252.2 bln in January as there were HUF 124.5 bln of net redemptions of forint securities, while the firmer forint reduced the stock by HUF 132.6 bln.

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