The Ministry of Finance is currently revising this year's budget and preparing for the next year.Continue reading
In March, the public deficit surged by HUF 562B (EUR 1.4B), revealing the factors behind its creation. Detailed data on the first three months of the general government accounts show minimal growth in VAT (Value Added Tax) receipts compared to the previous year, while interest expenditure doubled.
According to Világgazdaság, the Ministry of Finance reported a general government deficit of EUR 2.321B at the end of March, with an increase of EUR 563B (EUR 1.4B) in just one month.
Despite adjusting the deficit target from 2.9 percent to 4.5 percent, achieving only 92 percent of the annual plan set in the budget law within three months is concerning.
The shortfall in VAT revenues remains a significant concern, with a meager increase compared to last year’s figures. Meanwhile, interest expenditure has doubled, reaching HUF 1241B (EUR 3.1B) this year, attributing the jump to changes in interest payments on retail bonds, notably the Premium Hungarian Government Bond series.
Personal income tax receipts saw a notable increase, totaling HUF 1,076.4B (EUR 2.7B) in the first quarter, reflecting a rise in the wage bill. EU program revenues totaled HUF 328.2B (EUR 831.3M) by March 2024, representing 13.2 percent of the legal allocation (HUF 2,479.8B = EUR 6.2B).
Furthermore, the government allocated HUF 449.0B (EUR 1.1B) to the Pension Insurance Fund in February to support the 13th-month pension, marking an increase of HUF 31.0B (EUR 78.5M) from the previous year.
The total expenditure on pension benefits reached HUF 1,895.7B (EUR 4.8B), up by HUF 186B (EUR 471.4M) from the previous year. Additionally, HUF 588.9B (EUR 1.4B) was spent on curative and preventive care through the end of March.
The government plans to submit amendments to this year’s budget, aiming to reduce the deficit by delaying investments worth HUF 675B (EUR 1.7B). However, uncertainties arise about meeting the 4.5 percent deficit target, particularly if economic growth falls below expectations. Details on adjustments to this year’s budget under changed macroeconomic conditions will be outlined in the forthcoming amendment, soon to be presented to parliament.
Via Világgazdaság; Featured Image: Pixabay