Hungary's Jan-Jun general government deficit confirmed at 87.4% of year target.

By bne IntelliNews July 22, 2011
Hungary's general government cash-based budget deficit, excluding municipalities, reached HUF 1.03tn (EUR 3.84bn) in H1, the finance ministry confirmed preliminary figures released in early July. Thus, the deficit stood at 87.4% of the new full-year target set at HUF 1.18tn in order to reflect the purchase of 21.2% MOL shares from the Russian oil peer Surgutneftegas. In monthly terms, the government posted a HUF 310.4bn deficit in June alone, compared to HUF 58bn the preceding month. The worsening gap was driven by the central government sector, which posted a HUF 280.7bn deficit. The social insurance funds were also in the red by HUF 34.9bn, while extrabudgetary funds were again at a surplus (HUF 5.2bn). The ministry noted that due to cost-saving measures, the actual accumulated deficit stood at HUF 41.6bn below the H1 projections and said once more that the targeted deficit of 2.94% of GDP in 2011 is attainable. Although the transfer of private pension fund assets to the state pillar was made by June 14, the effects of the move will be reflected in the budget act in H2, the ministry also explained. The takeover of the debts of incumbent transport companies MAV and BKV, as well as the discussed buyout of public-private partnerships, are not taken into account in the assessment of the general government deficit targets. The ministry made no further changes to its forecast for the time dynamics of the budget programme. It noted that the central budget gap will expand to 125% of the 12-month target as at end-September, but will then gradually shrink and reach the planned level by the end of the year. The general government will post a HUF 445.1bn deficit in Q3 and turn on a HUF 295.5bn surplus in Q4, the ministry projected.
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