Seven-month budget deficit EUR 1.49bn

Budapest, August 8 (MTI) – Hungary’s cashflow-based budget deficit, excluding local councils, reached 464.8 billion forints (EUR 1.49bn) in the first seven months of 2016, a first reading of data released by the Economy Ministry on Monday shows.

In July alone, the budget ran a 62.7 billion forint deficit, up from 70.8 billion forints a year earlier. The central budget ran a 585.8 billion forints deficit in the first seven months of the year, while the social insurance funds and separate state funds had surpluses of 52.5 billion forints and 68.5 billion forints, respectively.

The seven-month deficit was little more than half of the 894.1 billion forints figure in 2015.

The ministry attributed the drop in the deficit to lower central budget expenditures, including lower co-payments to EU-funded programmes and lower debt service expenditure, and higher tax revenues resulting from favourable economic trends as well as from government measures to whiten the economy.

The ministry noted that the jobless rate, at 5.1 percent, is the lowest since 1989 and the number of employed, at 4.3 million, reached a peak in the same period, adding that a three-and-half year rise in real wages, tax reductions as well as low inflation supports consumption growth.

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The 2pc-of-GDP full-year deficit target, calculated according to EU accounting rules, “remains realistic and achievable”, the ministry said.

Source: MTI