General government deficit reaches HUF 53.8 bln in January

Telco

Hungary's cashflow-based general government balance, excluding local councils, came to HUF 53.8 bln in January, the National Economy Ministry confirmed in a second reading of data yesterday. According to the minsitry: The deficit was 6.1% of the full-year target of HUF 877.4 bln. 

The central budget had a HUF 104.4 bln deficit in January. The social security funds and the separate state funds had surpluses of HUF 35.3 bln and HUF 15.3 bln, respectively. In the same month a year earlier, the deficit reached HUF 75.4 bln.

The ministry explained the lower deficit this year with higher tax revenue – from VAT, excise tax, the financial transaction duty, personal income tax, social contributions and duties – as well as a "favorable interest balance".

The ministry noted that the deficit is front-loaded, as usual, with expenditures exceeding revenue in the first half of the year. January's central budget revenue was listed as being up 9.2% from a year earlier and was just 6.9% of the annual target, below the pro-rata 8.3%. Expenditures rose a slight 0.2% year-on-year and reached 7.3% of the annual plan.

Among the biggest taxes, revenue from VAT was up just 0.1% up from a year earlier and was 6.7% of the annual total. Excise duty revenue rose 21.1%, reflecting higher vehicle fuel sales, more revenue from tobacco products and the extension of a health tax on spirits. A 10% rise of revenue from personal income tax reflected higher wage payments, the ministry said. Other centralised revenue that included HUF 9.3 bln from electronic road tolls, which were extended and restructured starting 2015, rose 27.1% from January 2014.

These other revenues brought in 6.8% of the annual plan in January. EU funding received by ministries and other central budget chapters rose by 185.8%. Transfers of EU funding to successful applicants rose by nearly 58% in one year. Among other big expenditure items, interest rate spending fell by almost a third from a year earlier because of the differing timing of payments.

State-assets related spending was up 76.8% from January 2014 at HUF 17.1 bln, with 82% reflecting a HUF 14 bln capital rise in Paks II. Atomerőmü Fejlesztő, the project company for upgrading Hungary's sole nuclear power plant in Paks. Spending of the National Employment Fund rose 191% of which spending on public work schemes, dubbed Start program, jumped to HUF 11.6 bln from just HUF 245m one year earlier.

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