The Government’s economic policy has proven successful month after month, and this is also reflected by fiscal processes. At the end of April 2016, the central sub sector of the state budget accumulated a deficit of HUF 144.9bn, the lowest figure in this time of the year in the past fifteen years.

At the end of April 2016, the general government sector posted a deficit of HUF 209.0bn, while Social Security Funds and Extra Budgetary State Funds registered surpluses of HUF 42.6bn and HUF 21.5bn, respectively. One year ago, the deficit of the central sub sector of the state budget was HUF 465bn higher. The balance was also more favourable in the month of April: the deficit totalled HUF 19.1bn, well below the shortfall of HUF 73.1bn in the corresponding period of the previous year.

Lower expenditures and higher-than-expected tax revenues – the result of responsible and prudent fiscal policy -- were the main factors that have caused the difference between the balance data in April 2016 and 2015. Thanks to economic and job growth, revenues related to both wages and consumption (such as corporate tax, VAT, personal income tax, social contributions and charges) rose steadily. Anti-tax fraud measures, such as the introduction of on-line cash registers and the EKÁER, have substantially contributed to the improvement of taxpayer morale.

Compared to the same period of the previous year, expenditures related to EU programme funding and interest payments were down this year. The former factor stemmed from the closure of the operative programmes of the period 2007-2013 and the delayed payments of funds from the new period, 2014-2020, while the latter factor is attributable to a different interest payment schedule.

In light of favourable economic and fiscal processes we can state that this year’s deficit figure, 2 percent of GDP, is realistic and attainable, despite the amendment of the Budget, which is currently being debated in the parliament.

(Ministry for National Economy)