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General government deficit reaches 92.3% of full-year target by June

Hungaryʼs cashflow-based general government deficit, excluding local councils, reached HUF 823.3 bln in the year to June, a first reading of data released by the National Economy Ministry yesterday shows.

The deficit reached 92.3% of the HUF 892.4 bln full-year target, Econews calculated. The ministry noted that the deficit is front-loaded, as usual, with expenditures exceeding revenue in the first half of the year, and it reaffirmed the full-year deficit target of 2.4% of GDP.

It said that economic growth had raised tax revenue during the period, adding that higher wages had boosted payroll tax revenue, while measures to improve tax morale, such as connecting tills directly to the tax office, had been successful. The central budget deficit came to HUF 868.1 bln during the period, while the social insurance funds and separate state funds had surpluses of HUF 15.0 bln and HUF 29.8 bln, respectively.

The deficit was over the HUF 813.7 bln gap at the same time a year earlier, a difference the ministry attributed mainly to developments related to European Union funding. For the month of June, the deficit came to HUF 312.2 bln.

The gap was well over the HUF 132 bln deficit in the same month a year earlier, but the ministry noted that interest expenditures were up almost HUF 60 bln for the month, which can be explained by differences between the timing of interest payments during the year.