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Ministry forecasts HUF 60.76 billion fiscal surplus for May

Hungary's Finance Ministry forecasts a HUF 60.76 billion general government surplus, without local councils, in May, following a deficit of HUF 604.1 billion in January-April, the ministry said.

The ministry lowered its H1 deficit forecast to HUF 844.3 billion or 3.3% of GDP from HUF 892.7 billion or 3.4% of GDP in its previous report a month earlier. The ministry lifted its full-year cash-flow deficit target to HUF 993.918 billion, or 3.8% of GDP from of HUF 736.99 billion or 2.8% of GDP.

The cashflow-based based general government deficit including local councils will reach 4.3% of GDP this year while the accrual-based ESA '95, or Maastricht, deficit is targeted at 3.9%, Tamás Katona finance ministry state secretary said at a press conference on Wednesday.

On Monday, a delegation from the International Monetary Fund (IMF) and the European Commission said they agreed that Hungary's general government deficit could reach 3.9% of GDP instead of the previous target of 2.9% in 2009 as the economy contracts a deeper-than-expected 6.7%. The deficit is seen falling slightly to 3.8% in 2010 as GDP drops 0.9%.

The first-half central budget deficit target of HUF 739.2 billion leaves room for a HUF 174 billion deficit in June after a surplus of HUF 65.8 billion in May. The H1 projection is under the earlier forecast and shows HUF 125 billion higher revenue and HUF 73 billion more spending.

The ministry earlier targeted a HUF 156 billion surplus for the general government without local councils for the second half of the year. The higher deficit target now allows for a deficit of HUF 150 billion instead.

The revised target for full-year central budget revenue is HUF 8,374.6 billion, up HUF 135 billion from the previous full-year target. The expenditure target was raised by HUF 315.1 billion.

The central budget recorded a HUF 20.9 billion surplus in April as compared to a HUF 3.7 billion deficit in the same month a year earlier. Revenue fell 4.0% and expenditures dropped 7.1%.

Monthly revenue from corporate payments rose 11% from the same month a year earlier, while VAT inflow fell 22.6%.

On the expenditure side, April interest payment obligations of HUF 128.4 billion were up 13%, while spending on family subsidies of HUF 53 billion was 38.9% down from April 2008.

In January-April, consumption-related tax revenue of the central budget was HUF 150 billion less than in the same period a year earlier, but revenue from corporate tax rose HUF 13 billion. On the expenditure side, debt-related payments were up just HUF 6 billion at HUF 452.6 billion, but spending on family subsidies was HUF 50 billion less than in January-April  2008. (MTI – Econews)