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GDP proportionate deficit at 1.5% in Q1

The deficit of the general government sector in the 1st quarter of 2020 was HUF 180 billion, 1.5% of GDP according to preliminary data, according to data released by the Central Statistical Office (KSH).

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The balance deteriorated by HUF 309 bln, or by 2.6 percentage points as a proportion of GDP compared to the same period of the previous year. The change in the balance was due to a larger increase in expenditures than in revenues.

In Q1 2020, the general government sector’s revenues were HUF 4.807 trillion, and its expenditures HUF 4.987 tln.

Compared to the same period of 2019, revenues went up by HUF 114 bln or by 2.4%. HUF 53 bln (2.8%) increase in value was recorded in taxes on production, within which VAT revenue growth was HUF 27 bln (2.7%). Revenues from taxes on income were HUF 9.8 bln (1.3%) higher than a year earlier. Social contributions decreased by HUF 6.8 bln (by 0.5%). Other revenues increased by 59 bln (by 8.7%).

Expenditures increased by HUF 423 bln or by 9.3%. The growth in the case of paid compensation of employees was HUF 67 bln (6%), regarding intermediate consumption it was HUF 63 bln (8.5%). Social benefits other than social transfers in kind went up by HUF 82 bln (by 6.7%) and interest expenditures by HUF 24 bln (by 9.2%). Other general government sector expenditures grew by HUF 220 bln (by 25.8%), mainly due to the growth in investment grants. Gross fixed capital formation decreased by HUF 32 bln (by 8.9%).