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Govt sector Q3 deficit reaches 5.7% of GDP

Hungary’s government sector had a deficit of HUF 404bn in the third quarter of 2011, equivalent to 5.7% of GDP during the period, the Central Statistics Office (KSH) said on Tuesday.

Government sector revenue came to HUF 3,167bn in Q3. Expenditures reached HUF 3,571bn.

Revenue was up 6.3% from the same period a year earlier, as social security contributions rose 15.9% and taxes on revenue and imports brought in 10.1% more. At the same time, revenue from tax on income fell 19%.

Expenditures increased 12.6%. "Other expenditures" were up 80.1% because of "the accounting of VAT refund claims because of financially unsettled purchases", a state guarantee for a corporate bond issue by railway company MAV and a capital raise in national airline Malev, KSH said.

The accounting of the VAT refund claims could be related to refunds the state must make retroactively under a ruling by the European Court of Justice in July.