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Hungary GDP grows 4.2 pc, budget posts 698 million euros end-May deficit
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Hungary’s cash-flow-based budget, excluding local councils, ran a 213.4 billion forint (EUR 698m) deficit at the end of May, the Economy Ministry said on Wednesday. Hungary’s GDP grew by an unadjusted 4.2 percent year on year in the first quarter, the Central Statistical Office (KSH) said in a second reading of the data.
The shortfall was 18.3 percent of the 1,166.4 billion forint full-year target.
The budget position is “very favourable”, with the deficit standing at only 18 percent of the annual plan as against the time-proportionate 42 percent, economy ministry state secretary Péter Banai Benő said. Thanks to the increase in the number of jobholders and the growth in real wages, several revenue items are higher than originally planned, he told public television. Personal income tax revenues were 65 billion forints more than last year despite an increase in available tax allowances. Other employment-related tax revenues and VAT revenues were also up, he said.
On spending side, the state spent 29 billion forints more on home creation subsidies than in the same period last year, he added.
Hungary GDP grows 4.2 pc yr/yr in Q1
The growth was lifted by services, industry and construction, the latter two growing from a low base. Agriculture, however, dropped from a high base and cut growth by 0.2 percentage points.
KSH revised the unadjusted figure up from 4.1 percent in the first reading released on May 16.
In a quarter-on-quarter comparison, GDP was up an adjusted 1.3 percent in the first quarter, the same as in the first reading.
In a statement, the economy ministry said that the 4.2 percent growth figure was the second highest in the past 10 years. Hungary’s economy is on a “steady and balanced path”, it said, adding that the government’s measures to boost competitiveness taken in the spring, including tax cuts and wage agreements with unions, could further support growth in the long run. It is “extremely important” that the government “protect Hungary’s independence in terms of economic, tax, and employment policy,” the ministry said.