"Our mediocre economic performance compared with that of our competitors this past decade was the result of a mediocre performance of government," Matolcsy said.Continue reading
Hungary’s cash flow-based general government deficit, excluding local councils, reached 1,803.7 billion forints (EUR 5.09bn) at the end of July, widening on stimulus measures, the Finance Ministry said in a preliminary release of data on Monday.
The Orbán government originally planned 1,491.2 billion forints deficit for this year (2.9 percent of the GDP). However, in May, they modified the number, increasing to 3,990 billion forints (7.5 percent of the GDP).
“Recent measures aimed to support investments, job creation and families have left significant resources in the economy,” the ministry said.
“In order to restart the economy, it is necessary to continue pursuing supportive fiscal policies this year. Further stimulating the growth already under way will also help us achieve 5.5 percent economic growth this year,” it added.
The central budget ran a 1,620.9 billion forint deficit at the end of July, the social insurance funds were 221.9 billion forints in the red, and the separate state funds had a 39.1 billion forint surplus.
In the same period one year earlier, the central budget had a deficit of 2,165.0 billion forints.
The ministry noted that revenues from corporate tax, VAT, personal income tax and social security contributions were higher in January-July 2021 than in the same period a year earlier, However, revenues were significantly influenced by the economic impact of the coronavirus pandemic and the related employer benefits, the reduction of the social contribution tax from 17.5 percent to 15.5 percent as well as higher wage outflows, the increase in average earnings, it added.
Among expenditure items, the ministry noted spending on road developments (172.9 billion forints), transport programmes (123.1 billion forints), and support to boost competitiveness (91.8 billion forints) required by the coronavirus crisis.
In the featured photo illustration: Finance Minister Mihály Varga. Photo by Tamás Kovács/MTI