The central sub sector of the state budget closed the first two months of 2017 with a surplus of EUR 180.4bn, the best figure in the past fifteen years. Fiscal data already show that measures introduced under the six-year wage increase and tax reduction agreement are taking effect.

According to statistics, the central state budget posted a surplus of HUF 144.2bn, while Extra-Budgetary State Funds and Social Security Funds registered deficits of HUF 48.4bn and HUF 12.2bn, respectively.

The total surplus in+ the month of February 2017 alone was massive, at HUF 57.0bn.

Comparing the corresponding periods of 2016 and 2017 reveals that this year’s improved balance was the outcome of higher revenues (especially from VAT and personal income tax), stemming from favourable economic trends, pro-transparency and employment measures. Of the latter, the six-year wage deal must be singled out, as this has resulted in unprecedented wage hikes of 15 percent (minimum wage) and 25 percent (guaranteed minimum wage for skilled workers).

As people received the wage for January at the beginning of February, this was the month when they could spend more on consumption, thanks also to the reduction of VAT on certain basic food (milk, poultry meat, eggs).

In addition, incoming payments related to state assets as well as the delayed inflow of EU grants were also higher compared to the previous year.

The rise in expenditures was driven mainly by the higher amount of own funds related to the financing of EU programmes in the period 2014-2020.

The Ministry for National Economy predicts that the ESA deficit target of 2.4 percent of GDP for 2017 is attainable.

(Ministry for National Economy)