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Hungary Budget Deficit Already at 88% of Original Annual Plan

MTI-Hungary Today 2021.06.24.

Hungary’s cash flow-based budget deficit, excluding local councils, reached 1,312.6 billion forints (EUR 3.76bn) at the end of May, widening on stimulus measures, the Finance Ministry confirmed in detailed data released on Wednesday.

In May alone, the budget shortfall was 269 billion forints, 55.1 billion forints less than a year before.

Parliament adopted an amendment to the 2021 budget late in May, raising Hungary’s deficit target to  7.5 percent of GDP from 2.9 percent, based on European Union accounting methodology.

The January-May shortage of 1,312.6 billion forints is about 88% of the 1 491.2 billion forints deficit originally planned for this year and 39% of the revised annual deficit target.

The central budget deficit was 1,171.0 forints at the end of May. Social insurance funds were 155.0 billion forints in the red, while the separate state funds had a surplus of 13.4 billion forints.

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“The development of growing expenditures was influenced mainly by items necessary for re-starting the economy,” the ministry said.

“The aim of the government is to get everybody put in a difficult situation because of the pandemic back on their feet,” it added.

The ministry said Hungary’s quarter-on-quarter GDP growth of 2 percent in Q1 shows that “economic defence and economic recovery measures taken so far have worked”.

The public debt-to-GDP ratio is targeted at 79.9 percent in 2021, down from 80.4 percent in 2020.

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