Fiscal Council weighs in on bill that would raise 2016 spending, revenue by EUR 1.3bn

Budapest, April 29 (MTI) – The Fiscal Council has said it has “no fundamental objections” to a draft amendment that would raise both the expenditure and revenue side of this year’s budget by 401.3 billion forints (EUR 1.3bn).

The favourable development of tax bases, the high degree of utilisation of the growth tax credit, taxpayer discipline and more efficient tax collection provide the coverage for the increase on the expenditure side, the Council said late on Thursday.

The Council issued its opinion on a draft bill it received from the economy minister on April 25.

The deficit target of 2 percent of GDP appears achievable, even with the higher expenditures, the Council said. Year-end state debt as a percentage of GDP, at unchanged exchange rates and adjusted for the effect of pre-financing for European Union funding, is set to fall, too, in line with the law, it said. The Council noted, however, the importance of observing the development of the debt ratio calculated according to EU rules in order to prevent a possible widening of the cash-flow deficit because of the pre-financing for the EU funding.

The Council said it supports the draft bill’s intent to raise reserves.

The rise in fiscal expenditures will support an increase in the investment rate, and its extraordinary nature will not put the sustainability of the fiscal balance at risk, the Council said. It also acknowledged the planned financial consolidation of the system of educational institutions.

Source: http://mtva.hu/hu/hungary-matters