Hungary's cashflow-based general government deficit, excluding local councils, is expected to drop to HUF 606.4 billion in 2012 and to HUF 594.2 billion in 2013 from an upward amended HUF 1,184.2 billion target this year, a government decree published in the official gazette Magyar Közlöny on Tuesday shows.
The 2011 target was changed from an original HUF 687.4 billion earlier, reflecting the state's €1.88 billion purchase of a 21.2% stake in MOL from Russian peer Surgutneftegas in a deal announced in May.
Overall central government revenues, including those of the central budget, the national pension and health funds and the separate state funds, are projected to rise 1.9% in 2012 and by 2.0% in 2013. Central government revenues are seen to rise by 1.2% next year and by 1.8% in 2013.
The government expects central budget revenues to rise HUF 246 billion, or 3.2%, in 2012 and a further HUF 149 billion, or 1.7%, in 2012, mainly thanks to higher consumption. The decree assumes a HUF 106 billion rise in revenue from consumption-related taxes in 2012 and another HUF 175 billion increase in 2013.
Revenues from the population (mainly from personal income taxes) are expected to bring in HUF 85 billion more revenues in 2012, but they will drop near to this year's HUF 1,453 billion in 2012.
Overall budget revenue rises will come despite the fact that the HUF 94.5 billion central budget revenue targeted from the assets of former private pension fund members will not be repeated and that budget revenue from businesses is projected to drop by HUF 31 billion in both 2012 and 2013 from this year's HUF 1,283 billion target.
If compared to the original target in the 2011 Budget Act, central budget expenditure is set to rise by HUF 266 billion, or 3.0% next year, and by HUF 144 billion, or 1.6b%, in 2012.
Most of the rise reflects increased interest-rate expenditure, which will rise by HUF 48 billion in 2012 and by another HUF 989 billion in 2012 compared to this year's target of HUF 1,052 billion.
Support to the subsystems of the general government, such as local councils, set at HUF 1,882 billion for 2011, will rise HUF 243 billion in 2012, but is seen to drop by HUF 135 billion in 2013.
Cuts are planned in spending on consumer price subsidies, which will drop HUF 9 billion from HUF 109 billion this year in 2012, but are seen to rise a moderate HUF 1 billion in 2013.
Home-construction subsidies, targeted at HUF 126 billion in this year's budget, will also fall, by HUF 8 billion in 2012 and by another HUF 16 billion in 2013, according to plans.
The government also plans to cut spending on family allowances and social support next year by HUF 18 billion from HUF 628 billion budgeted this year, and to keep spending nominally unchanged in 2013.
The decree does not detail the sources of revenues either of the State Pension or Health Fund.
The Pension fund, with HUF 3,075 billion revenues this year, including a one-off HUF 436 billion revenue from the private pension fund assets, is projected to break even as usual, with spending and revenues projected to rise 1.2% in 2012 and 2.9% in 2013.
The government plans to cut spending of the State Health Fund by HUF 75 billion, or 5.1%, next year and by HUF 18 billion in 2013. The figures most likely include a planned large cut in spending on drug subsidies, with HUF 83 billion savings planned for 2012 and a total of HUF 120 billion by 2013 under the government's structural reform program, dubbed the Széll Kálmán Plan.
Revenues of the Health Fund are seen little changed in 2012 from HUF 1,371 billion this year, and are projected to drop HUF 10 billion in 2013. The deficit of the fund is seen to narrow from HUF 88.8 billion this year to HUF 13.9 billion in 2012 and to HUF 5.8 billion in 2013.