General gov’t runs HUF 213.4 bln deficit at end of May

Telco

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 213.4 billion deficit at the end of May, the Ministry for National Economy said today, confirming preliminary data, Hungarian news agency MTI reported. The deficit thus reached 18.3% of the HUF 1.1664 trillion full-year target.

The central budget had a HUF 180.1 bln deficit and the social insurance funds were HUF 85.9 bln in the red at the end of May. The separate state funds ran a HUF 52.6 bln surplus.

In May alone, the general government, excluding local councils, ran a HUF 91.1 bln deficit.

The five-month deficit was up from a HUF 13.2 bln deficit in the base period. 

Rising employment and consumption boosted by higher wages lifted budget revenues from VAT, personal income tax and payroll taxes, the ministry said. 

It cited the expansion of the family housing support system (CSOK) and the effects of a six-year wage agreement reached between the government, employers and unions late last year as factors behind the 4.2% economic growth posted in Q1. 

Budget revenues were also lifted by one-offs, such as the sale of state-owned farm land and the retroactive receipt of EU monies paid in advance to successful applicants by the central budget.

An amendment of the 2017 Budget Act voted on by Parliament modified the budget and gave extra funding to specific areas to further improve competitiveness, the ministry noted. However, this has not endangered either the meeting of the full-year deficit target of 2.4% of GDP or the further reduction of the state debt ratio expected by the end of the year, it added.

Total revenues in January-May 2017 amounted to HUF 6.978 tln, while expenditure was HUF 7.191 tln, compared to respective figures of HUF 6.524 tln and HUF 6.537 tln in January-May 2016.

Corporate tax income in January-May was HUF 276.1 bln, down by HUF 9.3 bln compared to the first five months of 2016. 

Income from value-added tax stood at HUF 1.3149 tln, up by HUF 51.9 bln. Income from excise tax, at HUF 365.6 bln, was however down by around HUF 26 bln.

Income from tax on financial transactions was up HUF 6.9 bln at HUF 89.7 bln, while income from the special bank levy was down to HUF 18.56 bln from HUF 18.9 bln earlier.

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