The fiscal policy of the Government continues to focus on boosting economic growth and supporting Hungarian families. Accordingly, expenditures related to the pre-financing of EU-funded projects, the financing of infrastructural projects and one-off items have made the largest impact on the budget in the first four months of 2018.

The deficit of central sub system of the state budget totalled HUF 1081.4bn at the end of April 2018. Within that, the central budget and Extra-Budgetary State Funds accumulated deficits of HUF 1119.5bn and HUF 7.0bn, respectively, while Social Security Funds posted a surplus of HUF 45.1bn. In the month of April 2018, the deficit of the central sub system was HUF 209.4bn.

Regarding to balance of the first four months of the year, expenditures related to EU-funded projects and certain state projects had the largest impact. In the former category, expenditures this year have hitherto totalled HUF 857.2bn, while they were HUF 318.3bn in the same period of last year. On the other hand, the funding transferred by Brussels to the government budget up to now was only HUF 63.9bn.

The implementation of projects such as the Modern Cities Programme, For a Healthy Budapest Programme, priority road construction projects and the modernization of Erzsébet youth camps has continued through state funds. Old age and other pensioners received Erzsébet vouchers of HUF 10 000 each in the spring, and the Government has also decided to provide people with extra assistance for the winter months and add a credit of HUF 12 000 to the gas bill of every household.

These measures had been enabled by a larger-than-previously-expected fiscal manouvering room. Thanks to the Government’s economic policy, in the period January-April 2018, revenues from VAT and personal income tax were up by HUF 136.4bn and HUF 82.3bn, respectively. Revenues from payroll taxes (pension and healthcare contributions and labour market surcharge) increased by HUF 91.0bn compared to the corresponding period of the previous year. The number of people in employment is currently 4.43 million in Hungary, and wages have been rising dynamically. These are major factors contributing to consumption growth and improvement in the living standards of families.

The Government continues to predict budget deficit of 2.4 percent of GDP and economic growth of 4 percent.

(Ministry for National Economy)