In the period January-May 2018, formerly prevailing trends continued with regard to public finances: of these, the pre-payment of funds for EU-financed projects and rising tax revenues can be singled out as the most significant. The Government continues to expect economic growth of 4 percent and a budget deficit of 2.4 percent of GDP for the year 2018.

The central sub sector of the state budget accumulated a deficit of HUF 1187.5bn in the initial five months of 2018.

Within that, the deficit of the central government balance and Extrabudgetary State Funds was HUF 1243.2bn and HUF 1.2bn, respectively. Social Security Funds posted a surplus of HUF 56.9bn. In the month of May 2018, the central sub sector had a deficit of HUF 106.1bn, a figure similar to the one registered in the same period of last year.

The amount of pre-payments for EU-funded projects totalled HUF 993.1bn at the end of May, double the figure recorded in the period January-May 2017, while the budget received revenues of only HUF 63.9bn. The disbursement of funds for the Smart Cities and Healthy Budapest Programmes as well as certain public road construction and reconstruction projects has accelerated.

In January-May 2018, revenues from VAT and personal income tax rose by HUF 62.0bn and HUF 107.2bn, respectively, in comparison to the same period of last year. Other contributions related to state pensions, health care and labour market were up by HUF 120.9bn year-on-year. This has been the result of the rising number of jobs and real wages and not of tax increases.

The Government of Hungary is aiming to make it increasingly attractive to get a job and to leave more of the income earned at families.  Dynamic economic growth, which is also opening up new opportunities for enterprises, has been a factor underpinning these goals.

(Ministry of Finance)