Hungary's budget deficit widens 22% y/y in Jan-May 2014

By bne IntelliNews June 6, 2014

Hungary's cash-based general government budget, excluding municipalities, posted a deficit of HUF 681.7bn (EUR 2.2bn) in January to May 2014, accounting for 69.2% of the full-year target, the economy ministry informed in a statement. The gap widened by 21.9% from a year earlier.

As in the previous months, the ministry attributed the shortfall to one-off factors such as the hike in teachers' wages (as of September 2013) and expenditures related to non-profit healthcare entities as well as the takeover of municipalities' debt.

The central government budget had a HUF 817.3bn deficit in January to May, or 85% of the annul plan. The extrabudgetary accounts registered a surplus of HUF 26.3bn. The social security funds had a surplus of HUF 109.3bn, which favourably compared to the balanced position, planned for full-2014.

In May alone, the cash-based general government budget, excluding municipalities, posted a surplus of HUF 269.4bn, reflecting higher revenue from taxes, which according to the ministry signals for a pickup of economic growth.

The cash-based general government deficit stood at HUF 929.2bn in 2013, accounting for 82.6% of the annual plan.

Hungary's general government sector's deficit stood at HUF 672bn in 2013, equal to 2.2% of the GDP, according to preliminary figures reported by the statistics office to Eurostat under the Excessive Deficit Procedure (EDP). According to the data, the government has met its deficit target, which was set at 2.7% of GDP. The government targets an ESA95 deficit of 2.9% of GDP for 2014.

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