The deficit of the central sub sector of the state budget closed the year 2015 much better than expected, with 1.9 percent of GDP, Minister for National Economy Mihály Varga said, commenting on the latest fiscal data released by the Hungarian Central Statistical Office (KSH) earlier today. Another key indicator, the general government debt-to-GDP ratio also fell, to 75.3 percent.

The favourable deficit figure was the result mainly of the performance of Hungary’s economy and the success of economic policy measures, he noted. Economic reforms can only work if economic environment is supportive, because then the volume of investment and the number of jobs rise, and fiscal revenues can subsequently increase.

Last year, revenues from taxes and other levies grew significantly, in case of each tax, exceeding prior estimates by some HUF 550bn, he pointed out. The debt rate has also declined further, shedding 0.9 percentage points since 2014 and hitting 75.3 percent of GDP. The share of forex debt within the total volume fell by 4.5 percentage points to 35.3 percent, thus the financing of the state budget has become sounder, more predictable and balanced, he stressed.

The ESA deficit target of the state budget is 2 percent of GDP in 2016. In order to bolster our economic sovereignty, the Government has been committed to continuing with the reduction of fiscal deficit and state debt, Mihály Varga said. The drafting of the 2017 Budget Bill has been fully in line with this principle.

In accordance with the practise of recent years, the KSH sent data on state debt and general government budget to the statistical office of the European Union, in the so-called EDP report, Minister of State for Public Finances Péter Benő Banai said. The Eurostat is to use it as basis for a report on member states for the European Commission.

(Ministry for National Economy)