The central sub sector of the state budget closed the month of January 2017 with a surplus of HUF 123.4bn, a favourable first-month figure in light of similar data from recent years. In the implementation of the 2017 Budget, the Government continues to be committed to managing public finances in a sustainable and responsible manner.

Within that figure, the central sub system, Social Security Funds and Extra-Budgetary State Funds posted surpluses of HUF 65.9bn, HUF 25.5bn and HUF 32.0bn, respectively. In January 2016, the respective balance was also positive, with a surplus of HUF 92.4bn.

Comparing the balances of January 2016 and 2015 reveals that mainly tax revenues (of corporate income tax, VAT, excise tax, social contributions and charges) were higher this year. This result stems primarily from positive real economic processes as well as Government measures aiming to improve economic transparency and boost job growth. In addition, fiscal revenues related to state assets also increased compared to the previous year. With regard to expenditures, they were up substantially at chapter-managed appropriation allocation funds concerning expenditures related to EU funding for the operative programmes of the period 2014-2020.

This year’s balance is expected to be determined by the reduction of VAT on some basic foods and lower payroll taxes, the Government’s unprecedented housing incentives and significant minimum wage hikes. These will leave more money at families, boosting disposable income and consumption growth.

Upbeat macro-economic predictions for 2017 signal that that the Government’s ESA deficit target of 2.4 percent of GDP is achievable.

(Ministry for National Economy)