As a result of the Government policy aiming for job growth and tax reductions as well as economic performance, the state budget closed the month of July with a surplus of HUF 37.2bn (EUR 114 million). Accordingly, the deficit of the central sub sector totalled HUF 352.7bn in the period January-July 2019, which constitutes 35.5 percent of the full-year deficit target. The target of 1.8 percent of GDP continues to be attainable.

Today more than 4.5 million people have a job in Hungary, and the unemployment rate has hit the lowest point since the regime change of 1989. Tax incentives and tax cuts are leaving more and more money at families, and this is also being reflected in the double-digit growth of average gross and net earnings. This constantly fuels household consumption, and that – coupled with the Government’s measures aiming for economic transparency – boosts fiscal revenues. Thanks to these developments, in the period January-July 2019 revenues were up by HUF 410.8bn from VAT, by HUF 127.3bn from PIT and by HUF 57.0bn from excise tax, year-on-year. In addition, revenues from social contribution tax, pension, healthcare and labour market contributions also increased by HUF 310.7bn compared to the corresponding period of the previous year. In the observed period, revenues from EU funds totalled HUF 441.0bn, while expenditures related to the pre-financing of EU-funded projects amounted to HUF 850.8bn. Among projects financed from domestic funding the Modern Cities Programme, the modernization of the railway network, Pest county projects as well as business investment incentives must be highlighted.

In the first seven months of the year, the deficit of the central sub sector of the state budget was HUF 446.7bn, while Extra-Budgetary State Funds and Social Security Funds had surpluses of HUF 73.5bn and HUF 20.5bn, respectively.

(Ministry of Economy)