Hungary’s budget deficit ends year well below target

By bne IntelliNews January 6, 2016

Hungary’s budget deficit finished 2015 at around 2% of economic output, Economy Minister Mihaly Varga announced on January 6.

The reading is well below the target of 2.4%, and also the 2.5% deficit the country reported in 2014. The positive result reflects higher tax revenues generated by the expanding economy. The minister estimates Hungary’s economy grew by some 2.8%-2.9% last year. However, that is a slowdown from the 3.7% growth seen in 2014, and expectation is rife that 2016 will continue that trend.

Detailed figures on the budget deficit will be published later this year, state secretary Peter Banai said. He noted that the nominal budget gap is likely to be HUF400bn (€1.3bn), or around half the original target of HUF892bn, once adjusted for EU funds Hungary did not receive.

Along with trimming the budget deficit, the government also succeeded in reducing the debt-to-GDP ratio, Varga claimed. He estimates the end-2015 ratio dropping to below 76% from 76.2%, where it sat at the end of 2014.

Dropping the state debt is vital for Budapest, which has been flirting with breaking debt rules of the EU's excessive deficit procedure. Hungary is also desperate to restore its investment grade sovereign rating. Alongside high state debt, the issues surrounding policymaking and the banks have helped persuade the rating agencies to keep Hungary in junk status since 2011.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Articles

Tashkent Stock Exchange reports decline in 1Q24 trading volume

Tashkent Stock Exchange (TSE) has released its results for 1Q24, revealing a significant decrease in trading volume y/y. The results report, compiled by the TSE and Avesta Investment Group, ... more

EIF signs guarantee agreements with 11 banks in Western Balkans, unlocking €750mn for small businesses

The European Investment Fund (EIF), part of the EIB Group, said on April 15 that it has signed guarantee agreements with 11 banks and financial intermediaries in the Western Balkans. These ... more

UniCredit sees modest growth and fiscal overshoot for Hungary in 2024

Hungary’s economic rebound will be modest this year, around 2%, and the return to potential growth is set to be postponed to 2025 with GDP expanding around 3.2%, according to UniCredit bank's ... more

Follow Us On

Most Read

  1. Iran vs Israel: Who is better equipped for war?
    5 days ago
  2. Saudi Arabia to scale back plans for Neom city
    8 days ago
  3. Oil continues to flow to Israel via Turkey despite Erdogan’s vehement speeches on plight of Gaza
    5 months ago
  4. BREAKING: Iraq, Syria and Jordan close airspace amid Iranian strike on Israel
    5 days ago
  5. PANNIER: Caspian military drills that exclude Russia and Iran have some people in Moscow asking questions
    6 days ago
  1. Russia could pay off its entire external debt tomorrow, in cash
    19 days ago
  2. Speculation swirls of “Men in Blue” in Crocus City Hall terrorist attack linked to FSB
    23 days ago
  3. Albanians campaign on social media to keep bus bridge created in freak accident
    1 year ago
  4. UBN: Russia could take the Baltic states in 48 hours
    28 days ago
  5. BRICS announce a blockchain-based payment system to create a common currency
    21 days ago

Reports

Dismiss