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Hungary’s Budget Deficit Has Almost Disappeared In 2016, Fresh Data Reveal

Tamás Székely 2016.06.08.

Hungary’s cash-flow-based budget deficit, excluding local councils, was 13.2 billion forints (EUR 42.5m) at the end of May, the Economy Ministry said. The deficit reached 1.7% of the 761.6 billion forint full-year target. In May alone, the general government ran a 131.7 billion forint surplus. The ministry noted that the January-May deficit was almost 500 billion forints lower than the gap in the same period a year earlier due to higher co-payments on European Union projects at the end of the 2007-2013 funding cycle, and lower co-payments at the start of the new funding cycle, as well as higher revenue from corporate tax, VAT, personal income tax and social contributions.

The Economy Ministry attributed higher budget revenue to the “favourable economic environment” and “dynamically expanding employment” as well as a crackdown on tax evasion that has improved tax morale. It also acknowledged the impact of the growth tax credit on higher corporate tax revenue. The tax credit allows companies with fast-growing earnings to defer corporate tax payments on profit increases over a period of two years. The 2% of GDP full-year deficit target, calculated according to EU accounting rules, “remains realistic and achievable”, the Ministry said.

Meanwhile the Central Statistical Office (KSH) said that Hungary’s GDP rose by 0.9% year-on-year in the first quarter of 2016. In a seasonally and workday-adjusted comparison, first-quarter GDP rose by an annual 0.4% and dropped by 0.8% quarter on quarter, KSH said. The figures are unchanged from the first reading released on May 13. KSH also reported that Hungary’s industrial output rose by an annual 5.3% in April, based on preliminary data, after a surprise drop of 4.6% in March, The April rise was the same when adjusted for the number of working days. Seasonally and working day-adjusted output rose by 5.4% month on month. In January-April, output was up an annual 1.5%.

via hungarymatters.hu, MTI and ksh.hu


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