Overall, the cash deficit totaled HUF 2,660B (EUR6.7B) in the first half of the year.Continue reading
The government reported a deficit of HUF 233.8B (EUR 586M) in November, the lowest monthly figure in recent years, amounting to 68% of the revised annual target. This positions the government to meet or exceed its 2023 fiscal goals, even with flexibility to adjust year-end spending to bolster growth or further reduce the deficit.
According to Világgazdaság, by November’s end, the central government sub-system recorded a cumulative deficit of HUF 3,284.3B (EUR 8.2B), primarily driven by a HUF 3,257.5B (EUR 8.1B) shortfall in the central budget. Social security funds saw a smaller deficit of HUF 226.8B (EUR 569M), while state funds reported a surplus of HUF 200B (EUR 502M). Compared to the HUF 586.7 billion (EUR 1.47B) deficit in November 2022, this year’s improvement reflects better fiscal management despite challenges.
Minister of Finance Mihály Varga highlighted the budget’s stabilization efforts, stating,
the government has consistently implemented measures to keep the deficit under control, demonstrating resilience in a volatile economic environment.”
However, VAT (Value Added Tax) shortfalls, a key challenge, have impacted both this year’s and next year’s budgets. Boosting consumption and VAT revenue remains critical, particularly to achieve the 3.7% deficit target outlined for 2024.
Finance Minister Mihály Varga. Photo: Facebook / Varga Mihály
The government adopted strategic measures to mitigate budget pressures, including postponing HUF 675B (EUR 1.7B) in investments and collecting HUF 400B (EUR 1B) from banks and multinational corporations. Interest payments by November totaled HUF 3,412.7B (EUR 8.5B), but a decline in HUF interest rates is expected to reduce these costs significantly in 2024.
Minister Varga expressed confidence in ongoing efforts, saying,
with prudent management, the budget balance has stabilized, positioning Hungary for fiscal sustainability in the coming years.”
The government remains committed to reducing the deficit to 3.7% of GDP in 2024, and below 3% by 2026, with a focus on sustainable growth and long-term fiscal discipline.
Via Világgazdaság; Featured Image: Pixabay