The Hungarian capital in trouble: Budapest faces huge deficit

The deputy mayor of Budapest announced that the budget of the Hungarian capital has dried up, and Budapest is running on overdraft.

Budapest in trouble

The capital’s municipality currently has minus HUF 1.1 billion (EUR 2,941,032.83) in its account, which means that Budapest is running on overdraft, MTI quotes Ambrus Kiss, deputy mayor-general.

Ambrus Kiss said on Thursday that Budapest’s fiscal situation is getting worse. “The state is forcing the capital to seek financial aid because a current account with a negative balance means, in reality, borrowing,” Kiss pointed out.

The capital can only function with credit

The amount of the loan will continue to increase because the next major revenue from the capital will not arrive until September. Kiss notes that none of the government’s overhead subsidy and the government subsidy for the renovation of the Chain Bridge have been received yet.

As things stand, Budapest is solvent until mid-September. The deputy mayor said that if the Hungarian government does not rush for help, Budapest will be in serious trouble.

BKV runs on credit

The Budapest Transport Company has also taken out a bridging loan. According to Kiss, 36 percent of operating expenses went to public transport, 18 percent to solidarity contributions, 8 percent to debt service and 6 percent to street lighting, napi.hu writes.