Pre-financing for EU-funded project lifts Hungarian government deficit to 135 pc of full-year target

Hungary’s cash flow-based budget, excluding local councils, ran a 1,842.4 billion forint (EUR 5.7m) deficit at the end of November, the Finance Ministry said in the first reading of data on Friday.

The deficit reached 135 percent of the 1,360.7 billion full-year target.

The ministry noted that government pre-financing for European Union-funded projects reached 1,737.4 billion forints by the end of November,

while transfers from Brussels came to just 574.6 billion forints. Expenditures were also lifted by a 41.2 billion forints top-up of pensions linked to economic growth and continued funding for developments such as road renovations and projects that are part of the Modern Cities Programme, it added.

The ministry said

revenue from VAT was up by 343.6 billion forints in January-November from the same period a year earlier. Revenue from personal income tax climbed 235.4 billion forints, payroll tax revenue increased 247.3 billion forints and excise tax revenue was up 81.3 billion forints.

The 2.4pc-of-GDP deficit target for the full year, calculated according to the EU‘s accrual-based accounting rules, is “achievable” alongside economic growth that is “expected to be well over 4 percent”, the ministry said.

Within public finances, the central budget ran a 1,856.1 billion forints deficit in January-November, the social security funds were 26.1 billion forints in the red and separate state funds had a surplus of 39.8 billion forints.

Alone in the month of November, the budget ran a 164.3 billion forints deficit.