The latest data show that the central sub sector of the state budget has accumulated a surplus of HUF 57.3bn in October 2016, an unprecedented figure in the past fifteen years. Favourable data are attributable to prudent fiscal management, certain Government measures and the inflow of EU funds due to Hungary.

The central state budget had a deficit of HUF 32.5bn, while Social Security Funds and Extra-Budgetary State Funds registered surpluses of HUF 8.4bn and HUF 81.4bn, respectively. In the same period of the previous year, the sector’s deficit was HUF 816.2bn. The difference between the balance this year and last stemmed mainly from a change in expenditure structure, lower expenditures, favourable economic trends and higher tax revenues due to pro-transparency measures. It has to be noted that the delayed transfer of long-overdue EU funds was also a significant factor.

One year ago, the surplus of the budget was HUF 138.4bn in the month of October, as a result of the registration of the transfer of EU funds. This year, however, although the Hungarian Government and the European Commission did resolve a dispute concerning the so-called “asphalt case”, and thus delayed funds were transferred to Hungary on the last day of October, due to technical accountancy reasons this amount is to show up only in the November balance.

The modified ESA deficit target of 1.7 percent is realistic; thanks especially to the expected acceleration of EU fund inflows and the positive fiscal impact of some Government measures in the remainder of the year. The Government is examining options on how to utilize the current fiscal manouvering room.

(Ministry for National Economy)