The latest data regarding state finances shows that the situation of the budget is stable, and so the 1.8 per cent to GDP deficit target set for the whole of 2019 according to EU methodology continues to remain attainable. Processes in the real economy, in particular, the GDP growth above 5 per cent in the first two quarters, the rise in wages and the fact that in the summer months unemployment fell to 3.4 per cent, guarantee the balance of the central budget.

The government’s successful economic policy ensures the balance of the central budget despite the fact that this summer, grants and support provided for businesses and families with children further increased. As one of the elements of the economy protection action plan, from 1 July 2019 the social contribution tax decreased by another 2 percentage points, from 19.5 per cent to 17.5 per cent which will further reduce the tax liabilities of businesses. Most of the measures included in the government’s family protection action plan, such as the baby expecting support and the grants provided for the car purchases of large families, started on the first of July.

In September this year, the surplus of the central sub-system amounted to HUF 207.2 billion; as a result, in total from 1 January 2019 up to the end of September, the central sub-system of state finances closed with a deficit of HUF 303.6 billion. In September 2019, the central budget received EU revenues worth HUF 464.4 billion; in the first nine months of the year, the central budget received funds in the form of EU grants to the total value of HUF 931.7 billion. Up to the end of September 2019, EU expenditures amounted to almost HUF 1,077.4 billion.

Up to the end of September, on the revenue side of the budget, 77.5 per cent of the annual estimate for Value Added Tax, meaning the total VAT revenue planned for 2019; 75.2 per cent of the total annual estimate for personal income tax, while 73.5 per cent of the total annual estimate for social contribution tax and pension, health insurance and labour market contributions were collected.

In the first nine months of 2019, from among domestic development expenditures, priority road construction projects, amounts paid towards the Modern Cities Programme, the refurbishment of the road network, the development of the railway network, amounts paid to the debit of the Investment Incentive allocation and amounts paid towards the grants of the sub-programmes of the Hungarian Villages Programme continued to represent a sizeable magnitude.

(Ministry of Finance)