Budapest, June 7 (MTI) – Hungary’s cash-flow-based budget deficit, excluding local councils, was 13.2 billion forints at the end of May, a first reading of data released by the Economy Ministry on Tuesday shows.
The deficit reached 1.7 percent 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 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 percent of GDP full-year deficit target, calculated according to EU accounting rules, “remains realistic and achievable”, the ministry said.
(HUF 100 = EUR 0.3208)