Hungary’s budget in serious trouble: EUR 2.62 billion missing
Hungary’s budget is in serious trouble even though the government cut back development expenditures due to the lack of EU funds. The reason is the lower-than-expected VAT income. That comes after Hungary experienced the EU’s highest inflation.
According to Forbes, the government calculated a HUF 8 thousand billion VAT income in 2023. However, by end-November, only 77.3% of that sum arrived. That is almost HUF 1 thousand billion (EUR 2.62 billion) below the expected amount.
Therefore, even though the government does not spend on EU development programs, the budget has a tremendous hole. According to portfolio.hu, the state-owned companies try to plug that. Their November contribution was HUF 334 billion after 2022 November’s HUF 33 billion.
Budget deficit HUF 4,074 bn in November, ministry confirms
Hungary’s cash-flow-based budget deficit was 4,074.3 billion forints (EUR 10.7bn) at the end of November, the Finance Ministry confirmed in a detailed reading of the data on Thursday.
The central budget deficit came to 3,824.9 billion forints at the end of the month and the social security funds were 421.3 billion forints in the red. Separate state funds had a 171.9 billion forint surplus.
The ministry said the war in Ukraine, the energy crisis resulting from sanctions, and the high-risk global economic environment had put the budget “under significant pressure”. In spite of the poor circumstances, the budget ensured the resources to preserve the value of pensions and maintain family subsidies, alongside the regulated system of utilities prices, it said.
“In spite of extraordinary expenditures, the government is reducing the deficit and public debt from year to year,” it added.
Spending on European Union-funded programmes came to 2,402.0 billion forints in January-November, while transfers from Brussels were just 1,265.4 billion forints.
The ministry said revenue from taxes and contributions was up by 15.9 percent from the base period.
Hungary trade surplus narrows to EUR 1.003 bn in October
Hungary’s trade surplus reached 1.003 billion euros in October, narrowing from 1.340 billion euros in the previous month, the Central Statistical Office (KSH) said in a second reading of data on Friday.
Exports edged up by an annual 1.1 percent to 12.771 billion euros, after falling for two months. Imports dropped by 13.2 percent to 11.768 billion euros, declining for the seventh month in a row.
Trade with other European Union member states accounted for 77 percent of Hungary’s exports and 70 percent of its imports during the month.
Hungary’s terms of trade improved by 9.7 percent during the period as the forint firmed 7.9 percent to the euro and 14 percent against the dollar.
In January-October, Hungary’s exports increased by 6.6 percent year-on-year to 125.635 billion euros, while imports fell by 6.1 percent to 117.706 billion euros. The trade surplus reached 7.929 billion euros.
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