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Hungary’s Budget Deficit Lower Than Expected In 2014

Tamás Székely 2015.01.10.

Hungary’s cash-flow-based budget deficit, excluding local councils, came to 825.7 billion forints in 2014, below the target of 1,151.5 billion, the economy ministry said. The ministry said the deficit as a percentage of GDP, calculated according to European Union rules, was likely to be lower than the 2.9% target. The deficit was 71.7% of the full-year target. For the month of December, the general government deficit came to 111.9 billion forints. The ministry highlighted the positive effect on the full-year budget balance of the pick-up of economic growth, the expansion of employment and the extra revenue from the mandatory connection of tills to the tax office. Revenue from corporate tax, VAT, personal income tax and social contributions were all over the targets in the 2014 budget act, it added.

Analysts forecast Hungary’s budget deficit, calculated according to European Union rules, at 2.4-2.5% of GDP for last year, after the release of cash-flow-based data from December. Zoltán Réczey of Buda-Cash Brókerház said the data released late Thursday by the economy ministry had not come as much of a surprise considering that releases in the past several months had shown the official 2.9% deficit target was “easily achievable”. He estimated the gap reached 2.5% of GDP for the full year. K&H Bank senior analyst Dávid Németh put the deficit for last year at 2.4%, noting that the government had continued to follow a conservative fiscal policy.

Hungary’s trade surplus also contributed to the positive budget deficit data. The country had an 831.8 million euro trade surplus in November, the Central Statistical Office (KSH) said in a first reading of data. Exports rose by 3.2% to 7.623 billion euros. Imports were up 2.4% at 6.791 billion euros. The surplus was up 76 million euros from the same month a year earlier. For January-November, the trade surplus came to 6.166 billion euros. Exports increased 3.5% to 78.039 billion euros. Imports were up 4.1% at 71.874 billion euros. ING chief analyst András Balatoni said a pickup in industrial output growth in November was evident in the trade surplus for the month.

via hungarymatters.hu photo: public domain


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