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Jul 07, 2016

Brexit won't affect Hungary's budget plans

Hungary maintains that its budget deficit target of 2.0 percent of gross domestic product for this year is "realistic and attainable"

Hungary sees no need to amend its budget plans for this year and next year as a result of the U.K.'s vote to leave the European Union, Mihály Varga, minister for National Economy has said.

According to Dow Jones, Hungary maintains that its budget deficit target of 2.0 percent of gross domestic product for this year is "realistic and attainable," remaining well below the EU-imposed deficit threshold of 3.0 percent of gross domestic product, the ministry added in its monthly statement on budget performance.

The year-to-date budget deficit widened sharply in June. Debt payment obligations increased and government co-financing of EU support funds, which started to flow in after an ebb since the start of the year, jumped in June, the ministry said.

The budget deficit totaled 402.1 billion HUF in the first half of this year, boosted by a sizeable June deficit of 388.9 billion HUF, ministry data shows.

The ministry said that was the narrowest budget shortfall for the January-June period for almost 15 years and significantly less than the 823.3 billion HUF deficit of the same period a year earlier.

The narrowing from a year earlier was the result of rising tax revenues on the back of economic growth, the launch of online cash registers in shops that directly link to the Hungarian Tax and Customs Authority and less EU support-related payments in the previous months, the ministry said.

The January-June deficit accounted for 53 percent of the full-year deficit target for this year, according to calculations by The Wall Street Journal.