Gen gov't starts 2021 with surplus; full-year gap expected at 6.5% of GDP

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Hungary's cash flow-based general government, excluding local councils, had a HUF 198.8 billion surplus at the end of January, Hungarian news agency MTI reports, citing a preliminary release by the Finance Ministry.

The ministry said the January surplus is "not uncommon" and attributed it to seasonal effects, adding that the general government is expected to finish the year with a deficit equivalent to 6.5% of GDP, calculated according to the European Union's accrual-based accounting rules.

The ministry said this year will be "fundamentally impacted" by the economic effects of the coronavirus pandemic.

"It is the government's aim to jump-start the Hungarian economy after the pandemic restrictions as soon as possible. Of key importance to this is the support of businesses, which is why the government is helping businesses with expedited, interest-free recovery credit in addition to investment incentive programs, tax reductions and payroll support," it said.

"The budget will continue to ensure all of the resources necessary for pandemic defense and the economic recovery," it added. 

The central budget had a HUF 180.5 bln surplus in January, while the separate state funds were HUF 22.4 bln in the black and the social insurance funds ran a deficit of HUF 4.1 bln.

According to the report, spending on pandemic defense measures came to HUF 60 bln in January, while expenditures on projects that are part of the Modern Cities Program reached HUF 42 bln, and payouts for transport development projects came to HUF 23.8 bln.

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