Huge budget deficit in Hungary by February

The National Economy Ministry released preliminary data on Monday showing that Hungary’s cash flow-based general government deficit reached HUF 1,722.8bn (EUR 4.31bn) at the end of February.

The central budget had a deficit of HUF 1,683.5bn at the end of the month and the social security funds were HUF 77.3bn in the red, but separate state funds had a HUF 38.0bn surplus.

The deficit widened from HUF 67.8bn at the end of January.

With a deficit of 4,100 billion forints in this year’s budget, the newly released figure means that more than 40 percent of the full-year deficit was accumulated in the year’s first two months.

The ministry attributed the gap to one-offs, pointing to VAT rebate seasonality that resulted in net VAT revenue of just HUF 318.5bn, 4pc of the full-year target, as well as a HUF 536bn expenditure for pensioners’ annual bonus, paid in February.

The ministry said that revenue from tax and contributions had climbed 13.5pc from the same period a year earlier.

Interest expenditures, first of all for interest payments on retail government securities, came to HUF 1,038.3bn, up HUF 182.9bn from the base period.

As we wrote earlier, new tax cuts to benefit hundreds of thousands of mothers in Hungary, read details HERE.