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Hungary general gov’t deficit hits 81.4% of 2011 target in February

Hungary had a cashflow-based general government deficit, excluding local councils, of HUF 559.7 billion in January-February or 81.4% of the full-year target, the National Economy Ministry said on Monday.

The central government ran a HUF 436.9 billion deficit in the month of February. The central budget had a HUF 419.5 billion deficit and the gap in the social insurance funds came to HUF 37.4 billion, but separate state funds had a surplus of more than HUF 20 billion.

The high deficit in February was not fundamental, but caused by the pace of revenue and expenditures, the ministry said.

Some HUF 528.8 billion in budget revenue from the Pension Reform and Debt Reduction Fund will be paid only in the second half of the year, the ministry said. The monies are part of assets to be transferred from private pension funds for members who returned to the state pillar.

HUF 187 billion in planned annual revenue from the bank levy and HUF 161 billion in revenue from crisis taxes on the telecommunications, energy and retail sectors will also show up on the budget only later in the year.

The HUF 250.3 billion in reserves allocated for a recently established Stability Fund will result in lower expenditures only during the rest of the year.

If the January-February deficit it adjusted for these factors, it comes to HUF 371.8 billion or 66% of the full-year target, the ministry noted. The deficit was magnified by high interest rate expenses in February as well as declining revenue from main taxes.

Revenue from ministries and other government institutions came to HUF 137.3 billion in February, about double the amount in the same month a year earlier because of a regrouping of HUF 86.6 billion in residuals which also showed up on the expenditure side.

Expenditures of ministries and other government institutions reached HUF 253.2 billion in February, or about one and a half times the spending in the same month a year earlier.

Gross interest expenditures came to HUF 304.8 billion in February, HUF 51.9 billion over the amount in the same month a year earlier. Net interest expenditures rose HUF 56.2 billion to HUF 296.7 billion.