The government’s successful economic policy, against the background of maintaining the balance of the budget, will be able to guarantee the reduction of the burdens of businesses, the availability of funds for the planned family support measures, and the funds necessary for domestic and EU developments.

In light of these facts, the 1.8 per cent deficit target to GDP set for the year continues to remain tenable and achievable.

As the deficit of the central sub-system of public finances amounted to HUF 158.0 billion in August this year, the deficit in the first eight months of the year amounted to HUF 510.8 billion. This represents 51.2 per cent of the annual plan which is pro rata in harmony with the balance of revenues and expenditures expected for the next few months. The basis for this was created by recent economic processes and the measures previously implemented by the government, in particular, the wage agreement concluded in 2016 and the already launched elements of the Economy Protection Action Plan, which contribute to the maintenance of the budget’s stability and the attainment of the government’s social policy goals.

In addition to the fact that the number of those in employment has been above 4.5 million for months – which had been unprecedented since the change of regime –, wages have also increased by double-digit figures. As a result, those living off wages and work are able to take more money home, and thanks to the tax reductions and tax benefits, the financial situation of families will improve even further. This also manifests itself in the development of the budget’s revenues: up to the end of August, 67.7 per cent of VAT, 67.0 per cent of personal income tax, and 65.8 per cent of the social contribution tax and employment-related contributions planned for the year had been collected.

On the expenditure side, one may observe, on the one hand, that the advancing of EU grants continued with a view to promoting economic growth (against EU paid expenditures of HUF 952.5 billion in the first eight months of the year, the national budget had a revenue receipt of HUF 467.3 billion so far on the basis of pre-financing).

On the other hand, domestic funds provide, among others, for the implementation of the sub-programmes of the Modern Cities Programme and the Hungarian Villages Programme designed to improve the population’s living conditions and projects throughout the country aimed at the refurbishment of the road and railway networks, as well as promote the improvement of the productivity of businesses. Most elements of the Family Protection Action Plan which seeks to promote the births of children and support the raising of children started in July, while with regard to the beginning of the school year, families received the family support grants due for September, including the family allowance, already in August, amounting to an pre-paid expenditure item of HUF 30.7 billion.

In the first eight months of the year, the deficit of the central budget within the central sub-system of public finances amounted to HUF 589.3 billion, extra-budgetary funds had an excess of HUF 81.8 billion, while social security funds closed with a deficit of HUF 3.3 billion.

(Ministry of Finance)