“The fundamental background for budget stability is provided by the performance of the Hungarian economy, thanks to which public finances closed July with a surplus of 94.4 billion forints”, the Ministry of National Economy’s Minister of State for Public Finances Péter Benő Banai said on M1 Hungarian television’s Monday evening current affairs program.

The Minister of State said the Hungarian economy could grow by some 4 percent this year, which goes hand-in-hand with an increase in employment and real wages.

Personal income tax revenues have increased, as have consumption-related revenues. Income tax revenues have increase by over 100 billon forints year-on-year, despite the fact that tax benefits for families with two children were expanded from January of this year, and a further increase is scheduled for January 2018, he added.

According to Mr. Banai, favourable real economy processes are what have enabled the government deficit to remain below the 3 percent limit in recent years.

He also spoke about the fact that the budget stability that is a result of these favourable real economy processes has enabled the advanced financing of EU funding. “This will result in a temporarily somewhat larger cash flow deficit in comparison to last year”, he added.

“The Government expects the cash flow balance to also be ‘smoothed out’ when the European Commission pays the finding, meaning that not only will the target deficit of 2.4 percent of GDP be tenable, but we will also be able to continue the reduction of the government debt”, he highlighted.

With relation to budget revenues, the Minister of State said that in comparison to previous years increased revenues were successfully realised with relation to all major tax revenue sources, including private sector contributions, items relating to public consumption and personal income tax payments.

He explained that despite tax cuts the favourable real economy processes are resulting in higher revenues overall than they have withdrawn from the budget.

On the budget expenditure side, Mr. Banai mentioned the advance payment of EU funding, wage increases and the home creation scheme as differences compared to last year. “The Hungarian State paid out some 25 billion forints more home creation funding to Hungarian families than it did last year”, he added.

(Ministry of National Economy/MTI)