Hungary’s cash flow-based budget, excluding local councils, ran a 176.4 billion (EUR 544m) forint deficit at the end of May, reaching 17.7% of the 998.4 billion forint full-year target, the finance ministry said in a preliminary release. The central budget deficit reached 253.4 billion forints, while the separate state funds and the social insurance funds had surpluses of 51.5 billion and 25.5 billion, respectively. In May alone, the general government deficit came to 137.4 billion forints.
The ministry said revenue from VAT was up 367.3 billion forints in January-May from the same period a year earlier, while revenue from personal income tax rose by 91.3 billion. Payroll tax revenue increased by 209.2 billion and excise tax revenue by 46.5 billion.
It attributed the growing revenue to higher wages and employment, which, along with tax preferences, have lifted consumption, as well as to government measures to improve tax compliance together with tax cuts. The ministry said pre-financing for European Union-funded projects continued to affect the balance: the government paid out 608.1 billion forints for EU projects in January-May, while transfers from Brussels came to just 305.9 billion.