General govʼt runs HUF 911.2 bln deficit at end of June

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Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 911.2 billion deficit at the end of June, preliminary data released by the Ministry for National Economy on Thursday show. The deficit thus reached 78.12% of the HUF 1,166.4 bln full-year target, state news wire MTI-Econews calculated.

The central budget had a HUF 902.4 bln deficit and the social insurance funds were HUF 110.5 bln in the red at the end of June. Separate state funds ran a HUF 101.7 bln surplus, the figures show.

In June alone, the general government excluding local councils - i.e. the central government - ran a HUF 697.9 bln deficit.

The six-month deficit was up from a HUF 402.1 bln deficit in the base period.

The ministry noted the effects of advance payments from domestic funds for EU tenders, which raised expenditures as the number of beneficiaries was also up. Advance payments reached HUF 1,046.2 bln in H1, compared to HUF 467.4 bln last year, and funding allocations from the EU are still far below this level.

Subsidies for home construction projects were also up compared to 2016 and interest payment fees also deserved attention as many payments happened in June, the ministry said.

On the income side, revenues related to employment, such as personal income and payroll taxes, were higher than expected, as was income from the itemized small business tax, known by its Hungarian acronym KATA.

The deficit target of 2.4% of GDP for the full year, calculated according to EU accounting rules, "can be safely achieved" and developments relating to the deficit are in line with plans, the ministry added.

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