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Budget Deficit HUF 727 Billion at end-April

MTI-Hungary Today 2020.05.08.

Hungary’s cash-flow-based budget, excluding local councils, posted a four-month deficit of 727.4 billion forints at the end of April, having recorded a surplus in that month, according to preliminary Finance Ministry data released on Friday.

In April, the budget was 104.5 billion forints in the black, partly thanks to 249.8 billion in transfers from Brussels.

The central budget ran a 610.6 billion forint deficit at the end of April.

Originally, the Orbán administration planned the budget with a deficit target of 367.0 billion forint for the full year.

The finance ministry noted that the April surplus on the back of EU funding inflows had partially offset extra spending on epidemic and economic protection measures connected with novel coronavirus.

New GDP Predictions for Pandemic-Hit Hungary

By the end of April, medical equipment purchases related to the epidemic came to almost 400 billion forints, the ministry said.

Fully 313.2 billion forints in EU revenue flowed into the budget in the first four months of the year, while EU-related spending came close to 842 billion, the ministry said.

Hungary’s convergence plan submitted to the European Commission on Tuesday contains a deficit target of 3.8 percent of GDP appeared as against 2.7 percent originally calculated by Hungary’s debt agency AKK. Also in the convergence report, the economy is expected to contract by 3 percent.

The commission’s spring economic forecast published on Wednesday forecasts a 7 percent contraction in GDP and a budget shortfall of 5.2 percent this year.

In the featured photo: Finance Minister Mihály Varga. Photo by Attila Kovács/MTI