Rising fiscal revenues, driven by solid economic performance, continue to underpin the stability of public finances, help reach social policy objectives as well as the financing of Hungarian and EU development projects. For the year 2018, the Government maintains that the 4 percent economic growth and 2.4 percent fiscal deficit targets will be met.

The Hungarian economy has been on a balanced and dynamic growth path: in Q2 2018 Hungary’s GDP grew by 4.9 percent year-on-year. Several economic policy measures of the Government have contributed to this achievement: for example, the six-year wage agreement, steps to improve the employment situation and increase economic transparency, thanks to which fiscal revenues grew significantly.

As a result, in the period January-September 2018 revenues were up year-on-year in the following categories: VAT (by HUF 377.9bn), excise tax (by HUF 77.3bn), PIT (by HUF 188.5bn), pension-, healthcare and labour market contributions (by HUF 205.3bn).

The fact that EU funds totalling HUF 157.9bn were received on the revenue side in the month of September 2018 alone should be highlighted. With this amount, revenues transferred from the EU budget grew to HUF 341bn in the first nine months of this year. In the remainder of the year, several hundreds of billions of forints are expected from Brussels. On the expenditure side, the financing of both EU-funded and state-funded projects (e.g. Modern Cities Programme, Healthy Budapest Programme, etc.) continue to account for a large part of transfers.

The central sub sector of the state budget accumulated a deficit of HUF 1496.5bn by the end of September 2018. Within that, the central budget had a shortfall of HUF 1542.9bn, while the Extra-Budgetary State Funds and Social Security Funds posted surpluses of 24.4bn and HUF 22.0bn, respectively. In the month of September, the central sub sector posted a surplus of HUF 149.8bn, which amount is roughly the same as that of transfers initiated by the Commission to the state budget in the month of September.

(Ministry of Finance)