Budget gap: best performance in 11 years
Published at: 08/04/2016 03:03 pm
Hungary posted 140.8 billion forint deficit in March 2016, the National Economy Ministry announced in a preliminary report. The monthly gap is small compared to the previous years and the end-March balance is also more favourable. The budget gap is the lowest since 2005.
Thanks to Hungarian reforms and a prudent fiscal policy, the accumulated deficit of the central sub sector of the state budget was HUF 125.8bn at the end of March 2016. In the same period one year ago, the deficit was much higher, at HUF 536.7bn. The difference between the balance at the end of March 2016 and 2015 was the consequence of higher tax revenues and lower expenditures this year. As a result of a favourable economic environment and employment growth, payments of both wage-related and consumption-related levies have been rising steadily. Government measures designed to combat the black economy have substantially improved taxpayer morale.
In comparison to the corresponding period of the previous year, expenditures related to EU programmes and interest payments decreased. The former is the consequence of the closing of operative programmes in the period 2007-2013 and the delayed payment of disbursements for the period 2014-2020, while the latter is due to the varying amounts of interest payments during the course of the year. The deficit target for this year continues to be 2 percent of GDP.