The central sub sector of the state budget closed the period January-March 2018 with a deficit of HUF 871.9bn. On the basis of current fiscal processes the Government is predicting fiscal deficit of 2.4 percent of GDP for this year and a falling government debt-to-GDP ratio underpinned by economic growth of above 4 percent of GDP.

In the period January-March, the deficit of the central budget was HUF 882.8bn; Extra-Budgetary State Funds accumulated a deficit of HUF 16.3bn while Social Security Funds posted a surplus of HUF 27.2bn. The monthly deficit was HUF 345.3bn in March, a figure that stems from various factors.

In comparison to the corresponding period of the previous year, besides expenditures related to projects financed solely from domestic funds (e.g.: Modern Cities Programme, Healthy Budapest Programme), those related to the pre-financing of EU-funded projects by Chapter-Managed Appropriation Allocations Funds were much higher than previously. These transfers totalled HUF 651.7bn this year and HUF 252.2bn last year. On the other hand, revenues from Brussels totalled only HUF 60.8bn. In March 2018, fiscal room enabled the one-off payment of HUF 10 000 in Erzsébet vouchers for every old age and other pensioner in the total value of HUF 27.7bn.

Revenues from VAT, personal income tax and payroll taxes were up by HUF 121.5bn, HUF 66.7bn and HUF 68.7bn, respectively, compared to the end of March 2017. This has been the result of the Government’s economic policy. Job and wage growth have led to rising fiscal revenues while tax cuts and tax incentives have left more money at Hungarian families.

(Ministry for National Economy)