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UPDATE: May general govt deficit at 105.4% of full-year target

Hungary's cash flow-based general government deficit, excluding local councils, was HUF 724.2 billion in January-May or 105.4% of the full-year target, the National Economy Ministry said in a second reading on Tuesday.

The headline figures were the same as the preliminary ones published on June 7.

The general government ran a HUF 58.0 billion deficit in May, the ministry said. The central budget deficit came in at HUF 40.1 billion for the month and the social security funds showed a HUF 24.4 billion gap, but separate state funds ran a HUF 6.5 billion surplus.

The ministry said Hungary will meet the government's ESA 2.94% deficit target and attributed the high pro-rata deficit in January-May to the timing of revenue and cost-savings.

The ministry noted that HUF 528.8 billion in revenue from assets in private pension funds would be transferred only in the second half of the year. Likewise, HUF 250.3 billion in fiscal savings measures will reduce the deficit mainly during the rest of the year, it added.

If the January-May deficit is adjusted for the pro rata amount of revenue from private pension fund assets, the gap would be HUF 503.9 billion or 73.3% of the full-year target, the ministry said.

The ministry modified its general government projections for the rest of the year based on data at the end of May and increased expenditures because of the purchase of a stake in oil and gas company MOL. The ministry noted that the purchase of the stake would not affect the deficit target calculated with the EU's accrual-based accounting.

The ministry now projects the accrual-based deficit will reach 90.9% of the full-year target by the end of June, then rise to 128.5% of the target by the end of September before finishing the year on the target.

Earlier, the ministry saw the deficit reaching 176.1% of the full-year target by the end of June before falling to 144% by the end of September and finishing the year on target.

The ministry sees the cash flow-based deficit reaching 28.2% of the full-year target by the end of June and 37.6% at the end of September, but ending the year 28.5% under the target to leave the general government with a HUF 337.1 billion surplus.

The deficit targets are calculated without the effect on expenditures of the takeover of the debt of transport companies MÁV and BKV and the planned buyout of public private partnerships (PPPs).