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Gen govʼt deficit reaches 69.37% of full-year target in Feb

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 254.6 billion deficit at the end of February, reaching 69.4% of the HUF 367 bln full-year target, state news wire MTI reports, citing a preliminary release by the Ministry of Finance.

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The central budget ran a HUF 283.7 bln deficit at the end of February, while separate state funds were HUF 36.3 bln in the black and the social insurance funds were HUF 7.2 bln in the red.

Alone in the month of February, the general government ran a HUF 345 bln deficit, MTI Econews calculated.

On the revenue side, revenue from VAT reached 15% of the full-year target by the end of February, while revenue from personal income tax stood at 17.3% and revenue from payroll tax was 16.5% of the full-year target.

Even with tax reductions because of the better overall performance of the economy revenue from VAT was up by HUF 56.4 bln, revenue from PIT was up HUF 40.1 bln and revenue from the corporate tax rose by HUF 35.3 bln, the statement said.

The Finance Ministry noted that pre-financing for European Union-funded projects continued to impact the central budget. Payouts in January-February for those projects came to HUF 569.4 bln during the period compared to HUF 200.2 bln of expenses at the same time last year.

Transfers from Brussels reached just HUF 61.2 bln during the first two months, down from HUF 281.4 bln during the same time in 2019.

Expenditures were affected by state funding for investments undertaken in the framework of the Modern Cities Program reaching HUF 28.3 bln, road upgrades costing HUF 13.2 bln. Road maintenance and upkeep costs reached HUF 31.5 bln, some HUF 8.7 bln went towards incentivizing investments and HUF 9.4 bln for helping large families purchase vehicles.

The ministry noted that the economic performance of Hungary in 2019 provides a solid basis for this year and that the government would continue to strengthen the economyʼs competitiveness to ensure that the rate of GDP growth would be above the European Union average by at least 2 percentage points.