Thanks to measures implemented with a view to making the economy more transparent and the high rate of economic growth, this year has been characterised by continuously rising tax revenues.

As a result, the budget continues to be able to supply the funds necessary for measures serving social objectives and the financing of developments implemented from local and EU funds. In line with the planned economic expansion above 4 per cent, the deficit target continues to remain 2.4 per cent to GDP.

In the past few years, the Hungarian economy has clearly become stable, and its growth balanced. In the second quarter of 2018, Hungary’s GDP increased spectacularly, by 4.9 per cent on a year-to-year basis. Today in Hungary almost 4.5 million people have jobs which is 770,000 more than in 2010. Parallel with this, the unemployment rate stands at 3.8 per cent. This shows that the economic policy which is based on wage increases and tax reductions is successful. As a result, the living standards of Hungarian families can perceivably improve, while the revenues of the budget are also on the rise.

In consequence of the government’s measures implemented with a view to making the economy more transparent and a rise in consumption, in the first ten months of 2018 value added tax revenues tax increased by HUF 440.2 billion, while excise revenues by some HUF 74 billion compared with last year’s corresponding period. There was a HUF 209 billion excess in personal income tax revenues despite the fact that the earnings of Hungarian workers are subject to the EU’s third lowest income tax. At the same time, the pension, health care and labour market contributions paid by insured workers exceeded the amount of revenues collected up to the end of October 2017 by HUF 224.4 billion. On the revenue side it should additionally be highlighted that in October Brussels transferred HUF 131 billion to the Hungarian budget, thereby increasing the sum of EU revenues transferred to the country’s budget to HUF 472 billion this year, which may significantly increase during the remainder of the year. Regarding expenditures it is necessary to point out that, with regard to the long weekend in November, the agencies financed from the central budget transferred wages already in the last few days of October: these transfers amounted to over HUF 100 billion. At the same time, family allowances were also sent out early; they constituted an item worth HUF 30 billion. The advancing of EU expenditures continued in October, as did the financing of developments implemented from local funds (including road construction projects, the refurbishment of the road network, Modern Cities Programme, Healthy Budapest Programme).

The central sub-sector of the state budget accumulated a deficit of HUF 1,678 billion in the first ten months of 2018. As part of this, the deficit of the central budget amounted to HUF 1,691.3 billion, the extra-budget state funds generated a surplus of HUF 37.6 billion, while the social security funds generated a deficit of HUF 24.3 billion. The central sub-sector’s deficit of HUF 181.6 billion in October this year is approximately the same as it was in the previous year’s corresponding month.

(Ministry of Finance)