Ministry confirms nine-month gen govt deficit at 107% of full-year target

Telco

Hungaryʼs cashflow-based general government deficit, excluding local councils, reached HUF 954.6 bln or 107% of the HUF 892.4 bln full-year target in January-September, the National Economy Ministry said today, confirming a first reading of data released on October 6.

The deficit was up HUF 90 bln from the same period a year earlier.

The ministry attributed the rise between the two years to changes to European Union funding, noting that at the same time, tax revenue was up by a considerable HUF 500 bln from a year earlier.

Budget chapter-allocated EU revenue was, in contrast, around HUF 407 bln lower than in January-September last year. Part of the drop reflected usual annual changes in accounting, another part was due to the suspension of the transfer of EU funds begun in April, the ministry said.

The European Commission has lifted a suspension and several hundred millions of forints could be transferred in the months ahead, lowering the deficit, the ministry added, noting that the delays in the transfers would not affect the accrual-based EU-conform deficit. When announcing the lifting of the suspension on September 29, deputy state secretary Nándor Csepreghy said that about HUF 210 bln in development funding would be transferred to Hungary in the coming weeks.

The ministry confirmed the full-year deficit target of 2.4% of GDP, calculated according to European Union rules, noting that the deficit is, as usual, front-loaded.

The central budget deficit came to HUF 1.007 trillion for January-September, reaching 119.6% of the annual target. The social insurance funds had a surplus of 29.9 bln against a plan to break even for the year. The separate state funds had a nine-month surplus of HUF 22.1 bln, compared to a targeted HUF 51 bln full-year deficit.

For the month of September, the deficit came to HUF 39.7 bln in contrast to the HUF 14.2 bln surplus in the same month a year earlier.

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