Hungary’s budget deficit, excluding local councils, reached 2,165 billion forints (EUR 6.3bn) at the end of July, widened by pandemic defense spending, economic stimulus and pre-financing for European Union-funded projects, the Finance Ministry said in a preliminary release of data on Friday.
The central budget ran a 1,841.4 billion forints deficit and the social insurance funds were 336.3 billion in the red, while separate state funds had a 12.7 billion surplus.
Originally, the Orbán government targeted a deficit of 367 billion forints (EUR 1 billion) for the whole year.
The ministry said spending on pandemic defense, such as acquisitions of personal protective equipment and ventilators, came to more than 520 billion forints by the end of July.
It said that payouts for EU-funded projects approached 1,274.9 billion forints by the end of July, while transfers from Brussels came to just 489.5 billion.
The government has been pre-financing EU-funded projects for years to avoid backups and ensure all available monies are used up.
“Resources necessary for jump-starting the economy are covered entirely from the Hungarian budget,” the ministry said, adding that expenditures were lifted by 123.1 billion forints for competitiveness-boosting grants for businesses as part of the policy response to the economic impact of the coronavirus crisis.
It also noted a combined 302.8 billion forints in spending on road developments and upkeep, 29.1 billion for investments carried out in the framework of the Modern Cities Programme and 27.0 billion in subsidies for purchases of vehicles by large families.
One-off performance bonuses for healthcare professionals cost the budget 101.3 billion.
“Although the economic recovery has begun, the jump-start after the state of emergency will continue to require resources of a large scale. It is the government’s intention to give Hungarian businesses all means of support and to create as many workplaces as have been lost because of the pandemic,” the ministry said.
In the featured photo illustration: Finance Minister Mihály Varga. Photo by Tibor Illyés/MTI
