Government investment expenditures rising

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Hungaryʼs general government ran a surplus of HUF 270.5 billion  in the first half of 2017, equivalent to 1.5% of GDP, the Central Statistical Office (KSH) said today.

The H1 surplus was up HUF 183.9 billion, or one percentage point of GDP, compared to the same period in 2016. Government sector revenue rose 9.9% or HUF 748.8 bln to HUF 8.322 trillion in H1 2017 compared to H1 2016. Social security contributions were up 2.4% or HUF 54.8 billion. PIT revenue was up HUF 96.2 bln or 7.9%, mainly on contributions of those who have taken up the growth tax credit, national news agency MTI reports.

Revenues from taxes on production were up by HUF 191.1 bln (6.2%); of these VAT revenue expansion was HUF 127.4 bln (8.1%). "Other revenues", which include EU transfers, were up most, rising by HUF 404.2 bln, or 41.7%.

Expenditures were up HUF 564.8 bln or by 7.5% in January-June, compared to the same period in 2016 and reached HUF 8.051 tln. Wage expenditure was up by HUF 148 bln (8.1%) annually in H1, social benefit expenses rose HUF 42 bln (1.9%), while other expenditures were up HUF 178.7 bln (13.9%).

Investments expenditures saw a jump of HUF 277.5 billion  translating into a 79.9% expansion. Current production expenditure however was down by HUF 51.8 bln (4.3%) and interest expenditure also fell by HUF 29.6 bln (5.2%).

In Q2, the surplus of the government sector was HUF 18.2 bln or 0.2% of GDP, up by HUF 38.9 bln or 0.4 pp of GDP compared to Q2 2016. Revenues rose by HUF 516.3 bln or 13.3% as expenditures were up 12.2%, or by HUF 477.4 bln, for Q2 alone.

Concerning the second preliminary reading of national accounts, KSH said that in 2016 the government sector had a deficit of HUF 656.5 bln, reaching 1.9% of GDP. According to data from the National Bank of Hungary, government debt was at HUF 26.164 tln,  or 73.9% of GDP, at the end of 2016.

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