Thanks to a predictable and responsible economic policy, the status of Hungarian budget has been characterized by favourable processes: at the end of June 2016, the deficit of the central sub system of the state budget totalled HUF 402.1bn, the lowest H1 figure in the past one-and-a-half decades. This clearly proves that Hungarian reforms have been working also in fiscal policy, and the deficit target is certainly attainable.

In the initial six months of the year, the central budget accumulated a deficit of HUF 514.9bn, while Social Security Funds and Extra-budgetary State Funds posted surpluses of HUF 47.2bn and HUF 65.6bn, respectively. For comparison: at the end of June 2015, the deficit of the central sub system of the state budget was more than double the current amount, HUF 823.3bn. The main factors behind the difference in the end-of-June balance data were lower expenditures by the central budget, favourable economic processes and higher tax revenues thanks to pro-transparency measures (EKÁER, on-line cash registers).

In the month of June 2016, the deficit of the central sub system was HUF 388.9bn, while in the same period of the previous year this indicator was HUF 312.2bn. Compared to previous months, expenditures in June were slightly higher, as a result of the different schedule of interest payments on state debt and the disbursement of funds related to the 2014-2020 EU programming period.

In light of the above, it can be concluded that the ESA deficit target of 2 percent of GDP is a realistic and attainable goal. In addition, we must emphasise that Brexit does not necessitate the amendment of either this year’s or next year’s budget.

(Ministry for National Economy)