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General govʼt deficit reaches 35.3% of full-year target

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 352.7 billion deficit at the end of July, thus reaching 35.3% of the HUF 998.4 bln full-year target, the Ministry of Finance said in a preliminary release of data on Thursday.    

The ministry noted that the general government had a HUF 37.2 bln surplus alone in the month of July, "as a result of the governmentʼs policy founded on increasing employment and reducing taxes, as well as thanks to the performance of the economy."

At the end of July, the central government deficit came to HUF 446.7 bln, while separate state funds had a surplus of HUF 73.5 bln and social insurance funds were HUF 20.5 bln in the black.

The ministry said revenue from VAT was up HUF 410.8 bln in January-July from the corresponding period a year earlier, revenue from personal income tax rose by HUF 127.3 bln, and revenue from excise tax was HUF 57.0 bln higher. Revenue from payroll tax and social contributions climbed HUF 310.7 bln during the period.

The ministry noted that pre-financing for European Union-funded projects continued to impact the general government balance. In January-July, that financing came to HUF 850.8 bln, while transfers from Brussels reached just HUF 441.0 bln.

Domestic funding also went to projects that are part of the Modern Cities Program, to railway upgrades, to developments in Pest County, and to investment incentives for businesses, the ministry added.

The full-year deficit target of 1.8% of GDP, calculated using EU accounting rules, "remains achievable," it said.