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Deficit rises to 121% of full-year target in August

Deficit rises to 121% of full-year target in August

Hungaryʼs cash flow-based general government, excluding local councils, ran a HUF 1,646.2 billion deficit at the end of August, the Ministry of Finance said in a preliminary release on Friday. The deficit thus reached 121% of the HUF 1,360.7 bln full-year target, MTI-Econews calculated.

Within the general government, the central budget ran a HUF 1,708.0 bln deficit at the end of August, while separate state funds and the social insurance funds had surpluses of HUF 21.8 bln and HUF 40.0 bln, respectively.

The ministry noted that pre-financing for EU-funded projects reached HUF 1,388.5 bln by the end of August, while transfers from Brussels came to just HUF 183 bln.

Expenditures were also lifted by spending on fully central budget-funded projects, such as the Modern Cities Program and the Healthy Budapest Program, as well as road renovations and support for corporate investments.

A combined HUF 30.7 bln of family subsidies for September were paid early, in August, to help out with householdsʼ back-to-school expenses, the ministry added.

Revenue from VAT in January-August was up HUF 169.3 bln from the corresponding period a year earlier, while revenue from personal income tax climbed HUF 170.4 bln and revenue from payroll taxes increased by HUF 187.6 bln. The ministry attributed the improvements to the shrinking shadow economy, stronger economic growth, expanding employment, and a dynamic increase in wages.

Alone in the month of August, the general government deficit came to HUF 155.3 bln.

The deficit target of 2.4% of GDP for the full year, calculated using EU accrual-based accounting rules, is “realistic” and “achievable” parallel with economic growth over 4%, the ministry said.