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Ministry forecasts HUF 244.5 bln fiscal deficit for November

  Hungary’s Finance Ministry on Tuesday said it forecasts a HUF 244.5 billion cash flow-based general government deficit, excluding local councils, for November up from a HUF 11.6 billion deficit in October.


The forecast brings the January-November deficit to HUF 987.1 billion. The ministry sees a HUF 65.6 billion surplus in December to meet the full-year deficit target of HUF 921.5 billion, equivalent to 3.4% of GDP.

The full-year deficit forecast was cut further by a slight HUF 7.4 billion from the projection in October, when the ministry reduced its deficit target by HUF 103 billion. The full-year deficit target calculates with a HUF 219.7 billion primary surplus for the central government, or 0.8% in terms of GDP.

In its latest forecast, the finance ministry projects a full-year central budget deficit of HUF 937.3 billion and a social insurance funds deficit of HUF 26.2 billion. Separate state funds are seen closing the year with a surplus of HUF 41.9 billion.

The November forecast is based on a HUF 159.1 billion central budget deficit and a HUF 80.7 billion deficit in the social insurance funds. The deficit has been high in November for years, because the state pays half of pensioners’ annual bonus as well as an adjustment sum based on corrections to pension indexation, Finance Ministry state secretary László Keller told journalists on Tuesday.

The targets for the last two months include a combined HUF 47 billion central budget transfer to MÁV Start, the passenger unit of state-owned railway MÁV, Keller said. MÁV Start was due to receive transfers from the privatization of MÁV Cargo, the railway’s cargo unit, but the privatization, signed in January, is still pending approval by the European Commission.

Hungary posted a cash flow-based general government deficit, excluding local governments, of HUF 11.6 billion in October. The figure was slightly under the ministry’s forecast for a HUF 13.5 billion deficit. October revenues from corporate taxes came to HUF 39.3 billion, exceeding the forecast by HUF 4.3 billion, VAT revenues were HUF 241.5 billion, HUF 5.3 billion more than planned, and personal income tax revenue of HUF 166.7 billion was HUF 3.7 billion over the target. October revenue from social security contribution, in contrast, was less than forecast.

The January-October deficit came to HUF 742.6 billion, the ministry said, confirming preliminary figures. The deficit was slightly under the ministry’s forecast of HUF 744.5 billion made in mid-October. The January-October deficit was equivalent to 2.7% of projected GDP. The central budget had a HUF 3.7 billion deficit in October, the social insurance funds ran a HUF 5.3 billion deficit and the separate state funds had a HUF 2.6 billion deficit. In January-October, the central budget registered a deficit of HUF 828 billion, HUF 5.2 billion under the forecast, and 87.7% of the full-year shortfall of HUF 943.9 billion projected in October.

The social insurance funds ran a January-October surplus of HUF 10.9 billion, a slight HUF 0.5 billion under the forecast. The funds are projected to close 2008 with a deficit of HUF 12 billion. The separate state funds had a surplus of HUF 74.5 billion in January-October, HUF 2.8 billion under the forecast and compared to a projected full-year surplus of HUF 27 billion. (MTI-Eco)