It is important information both for financial investors and investors in the real economy that state finances are stable and the sovereign debt is on the decrease, Péter Benő Banai, Minister of State for State Finances at the Ministry for National Economy said on the public service television news channel M1 in response to data published by the Central Statistical Office on Wednesday.

According to the figures of the Central Statistical Office, based on preliminary data, the government sector’s 2017 deficit amounted to HUF 746.3 billion, which is equal to 2 per cent of GDP, representing a deterioration of HUF 156.9 billion – 0.3 per cent to GDP – compared with the year before. Upon the calculation of these figures, Eximbank was included in the category of state finances. Without Eximbank the budget deficit would have amounted to HUF 754.4 billion last year. At the end of last year the government sector’s debt amounted to HUF 28,096 billion, 73.6 per cent to GDP, while without Eximbank it amounted to HUF 27,360 billion, 71.1 per cent to GDP.

The Minister of State argued investors primarily look at the trend of a country’s sovereign debt, and that is not affected by the method which is used for settling items concerning Eximbank. At the same time, he pointed out that Hungary has a dispute with Eurostat regarding the latter.

He stressed that in the past few years the government had managed to keep the budget deficit under control even against the background of tax reductions and excess state expenditures, including housing benefits and pay rises, expenditures had remained within acceptable limits in relation to state revenues, and the sovereign debt had decreased. According to the Minister of State, this was possible because not only the overall performance of the economy has increased in excess of the European average – by 4 per cent in 2017 –, but the number of people in employment and their earnings have also increased. The rise in the number of taxpayers and their taxable income offset the effects of tax reductions, he said.

(MTI)