Hungary budget runs 3.2 billion euros deficit at end-August

Hungary’s cash flow-based budget deficit, excluding local councils, was at 979.9 billion forints (EUR 3.2bn) at the end of August, the economy ministry confirmed in a second reading of data released on Thursday.

The deficit reached 84 percent of the 1,166.4 billion forint full-year target.

The central budget had a 1,019 billion forint deficit and the social insurance funds were 71.7 billion forints in the red at the end of August. Separate state funds ran a 110.8 billion forint surplus.

In August alone, the budget ran a 163.1 billion forint deficit.

The ministry noted that the deficit for the first eight months was 274 billion forints in the base period.

According to the ministry, in August revenues connected to employment and consumption — including income from healthcare contributions and payroll tax — were markedly up compared to last year because of higher wages and government support given to families even as the tax burden on companies diminished.

On the expenditures side, advanced payments from domestic funds for EU tenders raised spending. Advanced payments reached 1,324.6 billion forints in January-August, almost doubling compared to the base period, the ministry said.

Government subsidies for families wishing to construct homes were up 33.8 percent compared to the base period and family subsidies payments scheduled for September were brought forward to August to help families prepare for the start of the school year. The latter raised expenses by 33 billion forints.

The deficit target of 2.4 percent of GDP for the full year calculated according to EU accounting rules “can be safely achieved”, the ministry said.

Total revenue for January-August 2017 was 11,616 billion forints and expenditure was 12,596 billion forints compared with 10,745 billion forints and 11,019 billion forints respectively for January-August 2016.

Corporate tax income in January-August was 329 billion forints, down 41.9 billion forints compared with the first eight months of 2016.

Income from value-added tax was at 2,270.7 billion forints, up 173.8 billion forints. Income from excise tax at 646.7 billion forints was up by around 7.9 billion forints.

Income from financial transaction tax was up 12.3 billion forints at 143 billion forints and income from the special bank levy was down at 35.6 billion forints from 36.4 billion forints earlier.

Revenue from PIT was up 128.4 billion forints at 1,261.4 billion forints. Higher wages helped lift revenue.

Source: MTI