Hungary’s cash flow-based budget, excluding local councils, ran a deficit of 575.4 billion forints (EUR 1.73bn) or 57.6% of the 998.4 billion forint full-year target at the end of October, the finance ministry confirmed. On the revenue side, revenue from VAT reached 88.4% of the full-year target by the end of October, while revenue from personal income tax stood at 83.9%, revenue from excise tax was at 84.9% and revenue from payroll tax was 81.4% of the full-year target. The ministry noted that pre-financing for European Union-funded projects continued to impact the central budget. Payouts for those projects came to 1,239.5 billion forints during the period, while transfers from Brussels reached just 933.0 billion forints.
Expenditures were affected by state funding for investments undertaken in the framework of the Modern Cities Programme and the Hungarian Village Programme, road and railway upgrades, and incentives for business investments that boost productivity and create jobs at big companies, the ministry said. It noted that expenditures were raised further by spending on a package of family support measures introduced in July and elements of a programme to shield Hungary’s economy from the economic slowdown in Europe.
The ministry said the full-year deficit target of 1.8% of GDP, calculated according to the EU’s accrual-based accounting rules, is achievable.