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Government deficit reaches 109.6% of full-year target

The government deficit, which had already surpassed the full-year target in June, has increased by a further 5%. The cash flow-based general government, excluding local councils, stood at HUF 1.491 trillion deficit at the end of July, the Ministry of Finance said today.

The central budget deficit reached HUF 1.557 tln while separate state funds had a HUF 19.1 billion suplus, and social insurance funds were HUF 46.9 bln in the black. In July alone, the general government deficit came to HUF 70.4 bln, a significantly lower monthly deficit than in previous months, national news agency MTI reported.

In the first seven months of the year, budgetary revenue from VAT and personal income tax was up HUF 258.7 bln and HUF 149 bln, respectively, from the same period a year earlier, while payroll tax revenue climbed by HUF 163.7 bln.

The ministry said domestically funded programs and development projects such as spending on home subsidies for families, road and infrastructure investments, the Modern Cities Program and the Healthy Budapest Program had all raised expenses.

The ministry noted that pre-financing for EU-funded projects reached HUF 1.309 tln by the end of July, up by around 20% from the same period a year earlier, but transfers from Brussels came to just HUF 162 bln.

The main budgetary trends for July continued to be stable and balanced economic growth, with the government focusing on helping families and spurring growth and not on raising taxes, the ministry added.

The government is standing by its full-year deficit target of 2.4% of GDP and assumes GDP growth of more than 4% for the year.