The central sub system of the state budget closed the month of January 2016 with a surplus of HUF 92.2bn. Favourable data highlight prudent fiscal policy, as the central budget, Social Security Funds and Extra Budgetary State Funds registered surpluses of HUF 17.6bn, HUF 41.2bn and HUF 33.4bn, respectively.

One year before, the central sub sector accumulated a deficit of HUF 53.8bn. The difference between the January balances of 2016 and 2015 stemmed mainly from higher tax revenues this year (VAT, personal income tax, social and other contributions). This development has been the result of a higher number of people in employment; however, revenues gained not only from employment-related levies but also from consumption-related taxes. On the other hand, these data show the success of Government measures (e.g.: EKÁER, on-line cash registers) aimed at improving taxpaying morale. In the observed period, payments related to EU programmes were lower, thanks to the prior closing of the programmes of the 2007-2013 programming period and the allocation schedule of the 2014-2020 programming period.

The 2016 Budget projects general government budget deficit of 2 percent and lower state debt. The latest report of the European Commission confirms this forecast, as it states that this year’s planned deficit figure is within reach and it is set to fall further in the future. Brussels also prognosticates that Hungary’s government debt-to-GDP ratio is likely to fall to 74.3 percent in 2016 and 72.4 percent in 2017. This is another sign that Hungarian reforms are working and their achievements are gaining more and more recognition.

(Ministry for National Economy)