Extra fiscal revenues other than tax revenues also confirm the adequacy of the Government’s economic policy. The growth in expenditures is mainly due to the pre-financing of state- and EU-funded projects. The Ministry of Finance continues to expect economic growth of above 4 percent of GDP and fiscal deficit of 2.4 percent for the year 2018.

The central sub sector of the state budget accumulated a deficit of HUF 1420.5bn (EUR 4.4bn) by the end of June 2018. Within that, the deficit of the central budget totalled HUF 1476.3bn, while Extra-Budgetary State Funds and Social Security Funds posted surpluses of HUF 15.3bn and HUF 40.5bn, respectively.

In the month of June, the central sub sector had a deficit of HUF 233.0bn, about one-third of the figure registered in June 2017.

Recent economic results show that the Hungarian economy has been placed a stable growth path. This process has been assisted to a great extent by the six-year wage agreement, housing incentives and measures aiming to boost job growth and increase economic transparency. Thus more and more people have a job and rising wages, and this drives consumption growth. As a result of these trends, in the period January-June 2018 revenues from VAT, PIT and payroll taxes increased by HUF 214.2bn, HUF 128.3bn and HUF 141.2bn, respectively, compared to the corresponding period of the previous year.

On the expenditure side, several items must be underlined, such as public road construction and reconstruction projects, the projects of the Modern Cities Programme, the For a Healthy Budapest Programme and a joint project by the MRE Bethesda Children’s Hospital and the Budai Irgalmasrendi Hospital. Payments related to the pre-financing of EU-funded projects totalled HUF 1118.4bn, while the amount received by the state budget for this purpose was HUF 162bn in the observed period.

Interest payments totalled HUF 268.0bn, due to the fact that the coupon payment dates of several fixed-rate long-maturity government securities issued in 2008-2014 were scheduled for this period.

(Ministry of Finance)