Hungary’s H1 budget deficit widens 39.4% y/y, reaching 82% of annual target

By bne IntelliNews July 9, 2013

Hungary’s cash-based general government budget, excluding municipalities, posted a HUF 721.7bn (EUR 2.44bn) deficit in January-June 2013, accounting for 81.9% of the annual target, preliminary data from the finance ministry showed. The gap increased by 39.4% from a year earlier as expenditures grew by 9.2% y/y -faster than the revenues’ annual rise of 6.9%.

The central government budget generated a deficit of HUF 914.3bn in H1 2013, up 54.4% y/y. Spending grew by 12.5% y/y and revenues were up 6.7% y/y. Social security funds had a surplus of HUF 136.1bn in the period, as compared to a HUF 3.3bn deficit a year earlier. The surplus on the extrabudgetary accounts reached HUF 56.7bn, down 27.5% y/y.

Hungary’s general government sector ran a deficit of HUF 532.6bn in 2012, equalling to 1.9% of the GDP, according to preliminary figures reported by the statistics office to Eurostat under the Excessive Deficit Procedure (EDP).

Hungary's general government sector ran a deficit of HUF 558.2bn in 2012, accounting for 2% of the GDP. The government targets an ESA95 deficit of 2.7% of GDP in 2013.

The Council of EU finance ministers (Ecofin) backed on June 21 a proposal of the European Commission to lift the excessive deficit procedure against Hungary, which was initiated in 2004 after the country joined the EU. The Commission made its recommendation on May 29, concluding that the country has taken adequate adjustment measures to keep the fiscal deficit below the 3% threshold in both 2013 and 2014.

General Budget, H1, HUF bn        
  2012 2013 % y/y % 2013  plan
General government balance -517.7 -721.7 39.4 81.9
     revenue 6,779.4 7,249.8 6.9 47.3
     expenditure  7,297.1 7,971.5 9.2 49.2
  Central government balance -592.3 -914.3 54.4 104.6
     revenue 4,299.1 4,587.6 6.7 44.8
     expenditure  4,891.4 5,501.9 12.5 49.5
  Extrabudgetary funds balance 77.9 56.5 -27.5 -774.0
     revenue 235.5 223.1 -5.3 51.7
     expenditure  157.6 166.6 5.7 38.0
  Social Security Funds balance -3.3 136.1 - -
     revenue 2,244.8 2,439.1 8.7 52.4
     expenditure  2,248.1 2,303.0 2.4 49.5
Source: Ministry for National Economy        

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