GDP growth this year is expected to be much higher than the former estimate indicates, but related data are still being calculated and the Government may accordingly revise the GDP growth estimate at the end of this month, Minister of State for Public Finances Péter Benő Banai said at a press conference earlier today.

The Convergence Programme is scheduled to be sent to the European Commission at the end of April and this will outline a new macro-economic path until 2018 and also include the revised economic prognosis for this year, he said. As the Minister of State pointed out, the budget deficit is also seen to be more favourable than the current estimate of 2.9 percent of GDP.

Data released by the Hungarian Central Statistical Office (KSH) also show that gross general government debt at the end of last year was 76.9 percent of GDP, down by 0.4 percentage points compared to the previous year. These statistics, he added, are pointing to a lower debt level also in the future.

Péter Benő Banai stressed that since the government debt-to-GDP ratio peaked in 2011 with 81 percent, the level of debt has decreased year after year and there are only seven EU member states where last year’s debt figure was lower than that of 2011.

In light of 2014 deficit figures, Hungary may be in the upper half of the ranking of EU member states. EDP procedures are currently being carried out against 11 member states, while Hungary has managed to keep the budget deficit below the 3 percent threshold in spite of the fact that there were three elections in the country last year and former election years used to be characterized by ballooning deficits.

As he explained, the deficit figure is especially favourable, as it often happens that budget deficits are lowered at the expense of economic growth; however, in Hungary real economic as well as budget processes were on the right track in 2014.

In the drafting of the 2016 budget the maintaining of achievements, stimulating growth, improving employment and preserving the balance of general government budget must be in foreground, he said.

Responding to the questions of journalists, the Minister of State said that the on-line cash register scheme will this year be extended to, for example, hairdressers. The formerly estimated number of installed on-line cash registers was reached in August and these in 2015 will improve economic transparency and as a consequence result in higher fiscal revenues.

Revenues from the so-called advertisement tax are estimated at HUF 6.6bn for 2015.

Although the inflation rate was close to zero in 2014, tax revenues were still higher thanks to the extension of family tax allowances, the wage hike for teachers and the higher number of participants in public work schemes, he added.

(Ministry for National Economy)