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Dec 10, 2018

Pre-financing for EU-funded projects lifts Hungary's deficit to 135% of 2018 target

Hungary’s cash flow-based budget, excluding local councils, ran a 1,842.4 billion HUF (5.7b EUR) deficit at the end of November

Hungary’s cash flow-based budget, excluding local councils, ran a 1,842.4 billion HUF (5.7b EUR) deficit at the end of November, the government has revealed.

According to the Finance Ministry, the deficit reached 135 percent of the 1,360.7 billion full-year target. The ministry noted that government pre-financing for European Union-funded projects reached 1,737.4 billion HUF by the end of November, while transfers from Brussels came to just 574.6 billion HUF.

MTI states that expenditures were also lifted by a 41.2 billion HUF top-up of pensions linked to economic growth and continued funding for developments such as road renovations and projects that are part of the Modern Cities Programme.

The ministry said revenue from VAT was up by 343.6 billion HUF in January-November from the same period a year earlier. Revenue from personal income tax climbed 235.4 billion HUF, payroll tax revenue increased 247.3 billion HUF and excise tax revenue was up 81.3 billion HUF.

Figures show that the 2.4pc-of-GDP deficit target for the full year, calculated according to the EU‘s accrual-based accounting rules, is “achievable” alongside economic growth that is “expected to be well over 4 percent”.

The ministry said that within public finances, the central budget ran a 1,856.1 billion HUF deficit in January-November, the social security funds were 26.1 billion HUF in the red and separate state funds had a surplus of 39.8 billion HUF. Alone in the month of November, the budget ran a 164.3 billion HUF deficit.