Hungary's end-July budget deficit at 87% of full-year target, flat y/y

By bne IntelliNews August 8, 2014

Hungary's cash-based general government budget, excluding municipalities, posted a deficit of HUF 851.4bn (EUR 2.7bn) in the first seven months of 2014, accounting for 86.5% of the full-year target, the economy ministry informed in a statement. The gap remained unchanged 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 the municipalities' debt. Taking into account the economic recovery, improved employment and the effect of connecting cash machines on-line, the authorities expect revenue collection to increase in H2 2014 hence the fiscal position to improve by end-year.

The central government budget had a HUF 1,031.1bn deficit in Jan-July, equalling to 107.3% of the annul plan. The extrabudgetary accounts registered a surplus of HUF 45.5bn. The social security funds had a surplus of HUF 134.2bn.

In July alone, the cash-based general government budget, excluding municipalities, posted a deficit of HUF 37.7bn, down by 71% y/y.

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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