Hungary’s Finance Ministry forecasts a HUF 332.9 billion ($1.51 billion) general government deficit without local councils for March following a deficit of HUF 256.7 billion in the first two months.
The projected Q1 deficit of HUF 589.5 billion is estimated at 2.2l% of the full-year GDP and compares to a deficit target of HUF 730.6 billion for the whole year.
Finance Ministry state secretary László Keller said at a press conference on Thursday that the government will by all means keep the deficit below the 3l% limit in terms of GDP.
A projected HUF 210 billion cut in expenditures will take place in the second half of the year, and the ministry considers the annual deficit target to be achievable, Keller added.
The government will not modify the budget law after the introduction of tax changes in the second half of the year, Keller stressed, adding that cash-flow based general government deficit is set at HUF 730.6 billion, or 2.7l%, of GDP and 2.9l% of GDP according to accrual-based EU methodology ESA ‘95.
In its fresh Q1 forecast the ministry projects a central budget deficit of HUF 573.2 billion and raised the full-year figure by HUF 11.6 billion to HUF 581.9 billion, thus leaving less than HUF 10 billion in deficit for the period April to December.
Monthly revision of the full- year figure resulted in a HUF 33.5 billion rise in central budget expenditures, while revenues were raised by 21.8 billion. Higher expenditures are projected from a HUF 37.4 billion increase in full-year spending of budget-funded institutions.
On the revenue side, a HUF 24.3 billion increase is expected from EU transfers - including the effect of exchange rate changes - while income-tax inflow is projected to be HUF 7.2 billion lower than that in the previous projection.
The deficit in social insurance funds is forecast at HUF 44.6 billion in the first three months and HUF 151.4 billion for the full year, up HUF 10 billion from the previous forecast as a result of lower revenues.
The rising year-end central-budget and social-insurance deficit is offset by separate state funds jumping into the black, from a deficit of HUF 18.2 billion projected so far to a surplus of HUF 2.7 billion. (MTI-Econews)