“The Hungarian economy is performing increasingly well: In 2018, the deficit calculated according to EU methodology is expected to have been around 2 percent, instead of the planned 2.4%, and the sovereign debt to GDP ratio could have fallen even further to 71%”, Minister of Finance Mihály Varga announced.

“Public finances closed December 2018 with a surplus of 397.3 billion forints, as a result of which the annual cash deficit was 1445.1 billion forints”, the Minister added.

“Government measures are successful and have tangibly contributed to the economy achieving a performance of 5.2% in the third quarter of 2018. This means GDP for the first three quarters of last year grew by 4.9%, and could exceed preliminary forecasts to reach 4.6% for the whole of the year”, Mr. Varga told reporters.

“In the background of this are several factors, including the six-year wage agreement, the higher than ever support for home creation, and the measures introduced in the interests of whitening the economy”, the Minister pointed out. As a result, despite the tax cuts, treasury revenues were able to increase significantly: by some 403 billion forints in VAT, over 257 billion from personal income tax, and 266 billion forints from healthcare insurance and job market contributions, in addition to which an additional 90 billion forints were paid in even with relation to excise duties than in 2017”, the Minister pointed out.

“In 2018, the European Union transferred some 1,430 billion forints, amongst others for the realisation of the Széchenyi 2020 programme. On the other side of the balance sheet, last year EU-related expenditure exceeded 1886 billion forints and the budget is continuing to make advance payments” Mr. Varga emphasised.

“In addition to supporting families raising children, old people could also count on the government: pensions have preserved their purchasing power, in addition to which there was an opportunity for the payment of a pension premium for only the second time in Hungary’s history. The treasury paid out a significant sum, almost 158 billion forints, again last year in the interests of preserving the security of the Hungarian people and protecting the country’s borders”, he continued.

“With relation to the subsections of public finances, with relation to the whole of 2018 the central subsection and social security funds posted a deficit of 1368.8 billion forints and 83.9 billion forints, respectively, while separate state funds achieved a surplus of 7.6 billion forints”, Minster of State for Public Finances Péter Benő Banai said, detailing the 2018 figures.

“At the end of the year, the savings realised with respect to planned individual expenditures enabled the Government to regroup funds to several other areas, in accordance with the law”, he stated. “This, however, had not endangered the secure realisation of deficit targets or the further reduction of sovereign debt. The exact debt to GDP ratio of the public sector will become know in late March at the earliest”, the Minister of State told reporters.

(Ministry of Finance)