Hungary’s budget deficit is skyrocketing

Hungary’s cash flow-based budget deficit, excluding local councils, reached 1,704.5 billion forints (EUR 4.8bn) at the end of June, widening on stimulus measures, the finance ministry confirmed in a detailed reading of data on Friday.

“Recent measures, such as wage support, tax breaks and pension supplements, have left significant resources in the economy,” the ministry said. “The position of the budget this year has been impacted significantly, too, by tax exemptions and wage subsidies that went to players in hard-hit sectors until the end of May,” it added.

The ministry noted that, from June, pensioners got a retroactive inflation-linked supplement that adds up to around 26 billion forints.

“The budget continues to ensure the resources necessary for the restart of the economy: coverage required for workplace creation, for investment incentives and for tax reductions is available in full,” the ministry said.

The government aims to achieve economic growth this year of “at least 5.5 percent” through “supportive fiscal policy”, it added.

The central budget ran a 1,534.7 billion forint deficit at the end of June, the social insurance funds were by 198.2 billion forints in the red, and the separate state funds had a 28.4 billion forint surplus. In June alone, the budget deficit came to 392.0 billion forints.

The third of Hungarian restaurants to go bankrupt?

More proposals approved to speed up Hungarian economic recovery