Recently implemented Government measures and prudent fiscal management have resulted in the best government budget balance of the past two decades in the month of January, Minister of Finance Mihály Varga said.

The surplus posted in January, HUF 244.5bn, shows that the Hungarian economy has been performing better than before, and state finances are stable and predictable. Tax revenues were up by HUF 200bn year-on-year, and there also was a large amount from EU transfers.

This year’s budget is aimed at securing stable growth. This includes the safeguarding of Hungary’s expansion, maintaining the rate of economic growth, supporting families and the objective of full employment. Accordingly, funds earmarked for the support of families and housing incentives are higher than ever before. As of January 2019, the minimum wage (for unskilled workers) and guaranteed minimum wage (for skilled workers) was up each by 8 percent year-on-year, while pension benefits grew by 2.7 percent, more than the rate of inflation, the Minister noted.

As more and more people have a job and wages have been on the rise, the finances of families have improved year after year, and this is also reflected in consumption data, Mihály Varga added. In January 2019, revenues from VAT were up by HUF 153.9bn, from PIT by HUF 23.9bn, from payroll taxes (pension-, health insurance-, labour market contributions) by HUF 23.0bn, from excise taxes by HUF 17.1bn, year-on-year.  Revenues totalled HUF 222.9bn, while expenditures amounted to HUF 89.3bn: it means that the budget posted a surplus even without EU transfers. The main items on the expenditure side stemmed from the financing of state-funded projects, such as the Modern Cities Programme and the modernization of the country’s railway network, he said.

In January 2019, the surplus of the central sub sector of the state budget stemmed from the surpluses posted by the central budget (HUF 186.5bn), Extra-Budgetary State Funds (HUF 23bn), and the Social Security Fund (HUF 35bn). The ESA deficit is 1.8 percent of GDP; this indicator and the government debt-to-GDP ratio are also expected to decline further this year, Mihály Varga said.

(Ministry of Finance/MTI)