BUDAPEST: Hungary’s cash flow-based budget, excluding local councils, showed a 198.1 billion forint (EUR 638.9m) deficit at the end of March, preliminary data released by the Economy Ministry on Thursday show. The deficit reached 17 percent of the 1,166.4 billion forint full-year target.
The central budget posted a 168.6 billion forint deficit and the social insurance funds were 45.9 billion forints in the red at the end of March. Separate state funds ran a 16.4 billion forint surplus. The ministry noted that the deficit exceeded the 125.8 billion forint gap in the base period, but said it was “in line with expectations”.
Higher wages the result of an agreement reached between the government, employers and unions late last year boosted payroll tax revenue, it said. Budget revenue was also lifted by one-offs, such as the sale of state-owned farm land, and remuneration for pre-financing of EU-funded projects. The impact of VAT revenue on the budget was “more moderate” because of new rules shortening the deadline for VAT refund payments from 75 days to 45 days.
Alone in the month of March, the budget ran a 378.5 billion forint deficit, largely because of payouts of EU funding, the ministry said. The 2.4 percent-of-GDP deficit target for the full year remains “realistic” and “achievable”, which is “reflected in stable investor confidence”, the ministry added.
