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Hungary general govt deficit 126.2% of full-year target in July

Hungary's cash flow-based general government deficit, excluding local councils, was HUF 1,494.5 billion in January-July, or 126.2% of the modified full-year target, the National Economy Ministry said in a preliminary report on Friday.

Excluding the effect of the state's purchase of a 21.2% stake in Hungarian oil and gas company MOL or €1.88 billion at the beginning of the month, the deficit would have reached HUF 996.2 billion by the end of July, the ministry said.

Hungary's Parliament recently modified the full-year deficit target to HUF 1,184.2 billion from HUF 687.4 billion, because of the purchase of the MOL stake in a deal announced in May.

Adjusted for the pro rata effect of HUF 528.8 billion in revenue the budget is receiving from private pension fund assets transferred to the state's Pension Reform and Debt Reduction Fund and revenue from extraordinary sectoral taxes, as well as excluding the purchase of the MOL stake, the deficit would reach HUF 869.1 billion at the end of July, the ministry said.

The ministry left its projections for the rest of the year unchanged. It expects the deficit will reach HUF 1,479.7 billion, or 125% of the full-year target by the end of September before finishing the year at 100.0% of the full-year target. It projects the general government will have a deficit of HUF 445.1 billion in the third quarter and a surplus of HUF 295.5 billion in the fourth quarter.

In a breakdown of the general government, the ministry said the central budget ran a HUF 1,367.5 billion deficit in January-July. The gap for the social insurance funds reached HUF 212.4 billion, but separate state funds had a surplus of HUF 85.4 billion.

In June alone, the general government had a HUF 459.9 billion deficit. The central budget deficit came to HUF 460.1 billion and the social insurance funds were HUF 23.7 billion in the red, but separate state funds had a HUF 23.9 billion surplus.