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Finance Ministry: Full-year Deficit Target ‘Achievable’

MTI-Hungary Today 2019.12.20.

The Finance Ministry said the full-year deficit target of 1.8 percent of GDP, calculated according to the EU’s accrual-based accounting rules, was achievable after they confirmed that Hungary’s cash flow-based budget deficit, excluding local councils, had been 766.3 billion forints (EUR 2.3bn) at the end of November, at 76.7 percent of the full-year target.

In November alone, the shortfall came to 190.9 billion forints.

On the revenue side, revenue from VAT reached 95.8 percent of the full-year target at the end of November, while revenue from personal income tax amounted to 92.6 percent. Excise tax hit 94.6 percent of the revenue target while payroll tax hit 89.3 percent.

The Finance Ministry said that payouts for European Union-financed projects came to 1,341.3 billion forints, while transfers from Brussels reached 1,156 billion during the period.

Expenditures were affected by state funding for investments undertaken in the framework of the Modern Cities Programme and the Hungarian Village Programme, road and railway upgrades, and incentives for business investments that boost competitiveness, the ministry said.

The ministry noted that expenditures were raised further by spending on a package of family support measures introduced in July, with almost 400 billion forints paid out in prenatal baby support loans alone. Pension top-ups linked to economic growth totalled 77 billion forints, the ministry said.

The central budget ran a 659.5 billion forint deficit, while separate state funds were 78.5 billion in the black. Social insurance funds were 185.3 billion in the red.

The ministry said the full-year deficit target of 1.8 percent of GDP, calculated according to the EU’s accrual-based accounting rules, was achievable.

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