According to preliminary data, the deficit of the general government sector was 2.6 percent of GDP or HUF 829.1bn in 2014 instead of the 2.9 percent prior estimate. Primary deficit – excluding interest expenditures – fell to 1.5 percent of GDP from 2.1 percent last year. The gross general government debt-to-GDP ratio was 76.9 percent at the end of last year, down by 0.4 percentage points compared to the previous year. These data provide strong proof that the 2015 deficit estimate will be met and the level of debt is set to fall further.

The Hungarian Central Statistical Office (KSH) yesterday forwarded data on general government debt and budget deficit – calculated in line with the required methodology and sent in accordance with the usual annual schedule – to the Eurostat in the so-called EDP Report. Based on this document, the Eurostat is to submit its own report to the European Commission at the end of April.

The nominal revenues of the general government sector were up by 7.3 percent compared to the previous year. Higher revenues from taxes, social contributions and EU transfers are behind the 0.7 percentage-point growth. The 11.8 percent increase in accrual basis VAT revenues is especially noteworthy: this has been the result of the Government measures aiming for more economic transparency. The 7.6 percent increase of nominal expenditures, on the other hand, stemmed primarily from the more than 25 percent growth of investment expenditures.

Better-than-expected economic processes – resulting to a large extent from the mindful and consistent economic policy of the Government -- have been the main contributing factors behind the lower-than-projected budget deficit and the ongoing decrease of general government debt.

In 2014, GDP growth reached 3.6 percent, and that ensures that Hungary’s macro-economic balance remains sustainable.  It is obvious that the Hungarian economy has entered an ascending path and as the latest data also show, economic growth has been placed on ever sounder fundamentals.

(Ministry for National Economy)