The central sub sector of the state budget closed the first two months of the year with a surplus of HUF 67.3bn, thanks to a great extent to the Government’s economic policy.

The balanced growth expected for this year is seen to ensure that fiscal targets will be met. This will in turn help achieve the deficit target of 1.8 percent of GDP and a lower state debt-to-GDP ratio.

Fiscal data reflect the effects of wage hikes stipulated by the six-year wage agreement, the rising number of people in employment, consumption growth, the Government’s housing programme and measures aiming to increase economic transparency. As a consequence, revenues in the period January-February 2019 were up year-on-year in the following categories: by HUF 274.7bn from VAT, by HUF 21.8bn from PIT, by HUF 40.9bn from payroll taxes (healthcare and labour market contributions), and by HUF 21.1bn from excise taxes. By the end of February 2019, the amount of EU transfers to the state budget totalled HUF 281.4bn, while expenditures related to the financing of state projects totalled HUF 200.2bn. Of these, the projects related to the Modern Cities Programme and the modernization of the national railway network are noteworthy.

In the first two months of the year, the central budget, Extra-Budgetary State Funds and Social Security Funds posted surpluses of HUF 18.9bn, HUF 31.2bn and HUF 17.2bn, respectively. In the month of February, the central sub sector of the state budget had a deficit of HUF 177.2bn, as a result of the funding of mainly social and development projects.

(Ministry of Finance)