May Budget Ends with Surplus
The Hungarian economy has shown signs of recovery recently, with the budget focusing on safeguarding pensions, family allowances, and maintaining cuts by rationing utilities.
This economic upturn has helped in achieving the 4.5% deficit target, despite a deficit surge in March due to low VAT revenues and a significant increase in interest expenditures. The spike in interest payments was primarily caused by changes in retail bond interest payments, particularly with some Premium Hungarian Government Bond (PMÁP) series due in the first quarter of the year.
The Ministry of Finance reported that the budget closed in May with a surplus of HUF 49 billion (EUR 124 million), marking the best May performance since 2016. By the end of May, the central sub-system of public finances closed with a deficit of HUF 2,548.5 billion, including a central budget deficit of HUF 2,559.7 billion, a surplus of HUF 115.5 billion in earmarked funds, and a deficit of HUF 104.3 billion in social security funds.
Pension benefits amounted to HUF 2,848.4 billion, and preventive medical care reached HUF 1,090.8 billion by the end of May. Additionally, EU funds continued to flow steadily, with HUF 546.2 billion in revenue and HUF 801.9 billion in spending by the same period.
Despite relatively low tax levels, tax and contribution receipts were 9.9% higher than the previous year. The government is committed to reducing the deficit and debt, having rescheduled HUF 675 billion of public investment to meet the revised 4.5% deficit target while implementing various development projects this year.
The Ministry of Finance’s efforts have been commendable in managing the budget effectively and ensuring the stability and growth of the Hungarian economy. EU funds and increased tax revenues have played a crucial role in supporting the government’s initiatives and goals for economic recovery and sustainability.
