In spite of an economic policy built on tax cuts, continuously increasing tax revenues are resulting in the stability of the state budget. Accordingly, the implementation of various economic and social policy objectives continues to be ensured. With expected growth of well over 4 percent, the ESA deficit target of 2.4 percent of GDP can be achieved.

The government’s economic policy focusing on tax cuts and wage increases is proving its effectiveness within many fields. The number of people in employment continues to increase, as real wages are also steadily rising. More money remains in the pockets of families with children due to the various tax allowances, which significantly contributes to the increase in consumption. The use of the domestic and advanced EU development funding provided by the budget is aimed at improving the country’s economic situation. Thanks to these combined effects, in the third quarter of 2018 GDP growth reached a remarkable 5.2 percent.

As a result of the above, at the end of November 2018, revenues from personal income tax increased by HUF 235.4bn, while those from pension, health insurance and labour market contributions were up and 247.3bn, year-on-year. Revenues from value added tax increased by HUF 343.6bn, while excise revenues were up by HUF 81.3bn compared to the corresponding period of the previous year. After the arrival of a significant HUF 102.2bn in EU revenues in November, the total funds received by Hungary from Brussels increased to HUF 574.6bn. In parallel, expenditures related to EU-funded projects totalled HUF 1737.4 bn. Similarly to last year, economic performance this year has again allowed the payment of HUF 41.2bn in pension premiums. Furthermore, the financing of development projects implemented from domestic resources (including the refurbishment of the road network, the Modern Cities Programme, etc.) also continued.

In the period January to November 2018, the central subsector of the state budget accumulated a deficit of HUF 1842.4 bn. Within that, deficits of the Central Budget and Social Security Funds totalled HUF 1856.1bn and HUF 26.1bn respectively, while Extra-Budgetary State Funds posted a surplus of HUF 39.8bn. The central subsector deficit was HUF 164.3bn in November.

(Ministry of Finance)