The central sub sector of the state budget accumulated a deficit of HUF 914.9bn at the end of August 2015. Within that, the central budget posted a deficit of HUF 980.2bn, while Social Security Funds and Extra-Budgetary State Funds posted surpluses of HUF 33.7bn and HUF 31.6bn, respectively.

At the end of August 2014, the deficit of the central sub sector of the state budget totalled HUF 858.8bn. The discrepancy between the deficit amounts of this year and last stems from the different disbursement schedule of EU funding, as we have often emphasised. The revenues of Chapter-Administered Appropriations received from the EU are some HUF 370bn lower than in the same period of last year. This is attributable to the difference in the yearly schedule of sending and receiving EU funds as well as to items which are currently under EU scrutiny or negotiation and which are expected to be realized at a later date in the cash-flow account. These, however, do not influence the ESA balance as this allows funds requested properly but not received from the Commission until the end of the year to appear as revenues in the account.

In the month of August, the EU expenditures of Chapter-Administered Appropriations exceeded the payments in the same period of the previous year by some HUF 130bn, due mainly to increased fund outflow. However, revenues accumulated from corporate tax, value-added tax, excise tax, personal income tax and social contributions were up by some HUF 450bn year-on-year.

In August 2015, the deficit of the central sub sector of the state budget was HUF 20.8bn, while it was HUF 7.4bn in the corresponding period of the previous year. One of the causes behind this is that – aiming to assist the start in the school year -- family benefits, disability benefits and income support for disabled people for the month of September were transferred by the Hungarian State Treasury as early as the end of August. Accordingly, expenditures soared by HUF 34.5bn, but this amount will not appear in September’s balance.

Hungary maintains the ESA deficit target for the year 2015 at 2.4 percent of GDP, a realistic figure in light of revenue and expenditure schedules as well as fiscal data from the end of August.

(Ministry for National Economy)