Gov't Submits Amendments to 2023 Budget to Parl't

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The government submitted amendments to the 2023 budget act to parliament on Thursday, according to a report by state news wire MTI.

The bill would raise the revenue target to HUF 36.358 trillion from HUF 31.074 tln in the 2023 budget act approved by lawmakers in July.

It would raise the expenditure target to nearly HUF 39.759 tln from HUF 33.426 tln.

The deficit would widen to HUF 3.400 tln from HUF 2.352 tln if approved by MPs.

The bill contains a provision mandating the finance minister to reduce the 2023 accrual-based deficit target if forecasts point to GDP growth over the 1.5% assumption.

It targets a reduction in year-end state debt, relative to GDP, to 69.7% in 2023 from an estimated 73.5% in 2022.

The bill also targets net expenditures on debt servicing of HUF 2.117 tln, up from HUF 1.805 tln in the 2023 budget act.

The new expenditure target for a fund established to protect the regulated utility price scheme for households would be HUF 2.610 tln, a multiple of the HUF 670 bln target in the budget act. The bill targets HUF 1.458 tln in expenditures from the fund to protect household utility prices and HUF 279 bln for private sector support. Compensation of HUF 399.6 bln is earmarked for central budget-funded institutions and HUF 144.7 bln for local councils. Support for state-owned companies is set at HUF 178.2 bln and for institutions maintained by churches and civil organizations at HUF 150.3 bln.

Central budget support for the fund is set at HUF 1.198 tln in the bill, while payments, contributions, and windfall profit taxes from companies in the energy, mining, telecommunications, airline, and pharmaceutical sectors would cover the rest of the fund's expenditures.

Expenditures of a fund established to bolster the country's defense are unchanged at HUF 842 bln in the bill.

Expenditures of the pension insurance fund are set at nearly HUF 5.555 tln in the bill, up from almost HUF 4.903 tln in the budget act.

State investment expenditures are targeted at HUF 580 bln, more than double the HUF 257.2 bln in the budget act.

The bill earmarks HUF 17.1 bln in expenditures for the newly established Integrity Authority.

The 2023 budget act assumed GDP growth of 4.1% and 5.2% average annual inflation. Appendices attached to the bill submitted on Thursday show the government assumes average annual inflation of 15% in 2023.

In a statement issued Thursday, the Finance Ministry said the bill would raise reserves in the budget to HUF 255 bln from 170 bln. It added that inflation is expected to fall into the single digits by year-end

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