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General govʼt maintains budget surplus to end of February

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 67.3 billion surplus at the end of February, the Ministry of Finance said in a preliminary release of data Friday. The deficit target for the full year is HUF 998.4 bln.   

The central budget surplus reached HUF 18.9 bln, while separate state funds had a HUF 31.2 bln surplus and social insurance funds were HUF 17.2 bln in the black, state news wire MTI reported.

In February alone, the general government posted a deficit of around HUF 177.2 bln; however, this followed a surplus of HUF 244.5 bln in January.

Main expenditure items in February included spending on measures to promote social goals and development programs. 

In January and February, budgetary revenues from VAT and personal income tax were up HUF 274.7 bln and HUF 21.8 bln, respectively, from the corresponding period of 2018, while payroll tax revenue climbed by HUF 40.9 bln. Excise tax revenue was up by HUF 21.1 bln.   

The ministry said the numbers reflect rising wages stemming from the governmentʼs six-year wage agreement with employers and unions, higher numbers of employed workers, increasing household consumption, government support for familiesʼ home purchases and measures to whiten the economy.

Transfers from the EU accounted for HUF 281.4 bln of income and the government made HUF 200.2 bln of payments for EU projects during the first two months. Most of the funding went towards the Modern Cities Program and railway network development projects. 

The government has a full-year deficit target of 1.8% of GDP, calculating with EU methodology, and expects the level of government debt to fall. Reaching the deficit target is supported by the governmentʼs economic policy and balanced growth that ensures the sustainability of the budget, the ministry said.