As a result of the government’s disciplined budgetary policy and favourable economic processes, state finances continue to remain characterised by stability and increasing revenues. In consequence, the deficit of the first six months amounted to HUF 390 billion which is 39.1 per cent of the planned deficit. The deficit target of 1.8 per cent to GDP for the whole of the year continues to remain realistic and achievable, while the sovereign debt indicator, too, will decrease further.

The Hungarian economy is on a dynamic and balanced course of growth; in the first quarter, there was a 5.3 per cent growth. A variety of measures adopted by the government played a prominent role in this achievement. From among these, specific mention should be made of the agreement concluded in 2016 with a view to wage increases and tax reductions, as a result of which today there are 4.5 million people in employment in Hungary.

Following from this, in the first six months of the year – despite the fact that Hungary has one of the lowest income tax rates in the EU –, personal income tax revenues were HUF 105.4 billion higher, while the revenues arising from the related social contribution tax and the pension, health insurance and labour market contributions were in total HUF 260.1 billion higher than during the corresponding period of last year. Thanks to the double-digit pay rise and tax benefits, there is more money left with families which are in consequence able to spend more on consumption. Combined with the measures that seek to whiten the economy and the regulations which changed last year in favour of good taxpayers, this manifests itself in the fact that Value Added Tax revenues were HUF 397.4 billion higher, while excise tax revenues were HUF 45.3 billion higher than in the first six months of last year.

Up to the end of June 2019, Brussels transferred HUF 346.6 billion to Hungary, while the government continues to advance EU grants. As a result, in the first six months of the year, the budget paid HUF 710.6 billion to awarded applicants. Within domestic grants, the developments of the Modern Cities Programme, the modernisation of the country’s railway network, projects implemented in Pest County, measures aimed at the promotion of tourism and the incentivisation of the projects of businesses constitute major elements.

As in June the deficit of the central sub-system amounted to HUF 213.6 billion, the cumulative data of the first half of the year amounted to 39.1 per cent of the planned deficit. Within this, the central budget closed with a deficit of HUF 467.3 billion. At the same time, extra-budgetary funds achieved a surplus of HUF 61 billion, while social security funds achieved a surplus of HUF 16.3 billion.

(Ministry of Finance/MTI)