Hungary 2017 general gov't deficit 2% of GDP

General government deficit amounted to HUF 746.3 bn, the KSH said. The figure excluding Eximbank would come to HUF 754.4 bn, so reclassifying its debt actually slightly improved the balance. The deficit equals 2% of Hungary's GDP, compared to a 2.4% official target set by the government.

The general government balance was HUF 156.9 bn lower than in 2016, while deficit as a proportion of GDP grew 0.3 pp from 1.7% in 2016.

Eximbank dispute over

Based on data from the National Bank of Hungary (MNB), the debt of the general government sector was HUF 28,096 bn, or 73.6% of GDP, at the end of 2017; without Eximbank, the figure was HUF 27,360 bn, or 71.7% of GDP, the KSH said.

This means that after years of disagreement with Eurostat over the status of Eximbank, Hungary has reclassified the bank as part of the general government sector, which means its debt should be added to overall government debt.

The hard data

The general government sector’s revenue was HUF 17,008.4 bn and its expenditure HUF 17,754.7 bn.

Revenues grew by HUF 1,115.6 bn or by 7%. Taxes on production increased by HUF 458.1 bn (7.1%), within which VAT revenues rose by HUF 328 bn (9.9%). Revenues from income taxes were HUF 203.4 bn (7.7%) higher than a year earlier. Social contributions increased by HUF 76.6 bn (1.6%). Other revenues went up by HUF 375.9 bn or by 18.7%, mainly as a result of a significant growth in EU transfers.

Expenditures increased by HUF 1,272.4 bn or by 7.7%. The growth in the case of paid compensation of employees was HUF 271 bn (7%), while social benefits other than social transfers in kind rose HUF 140.5 bn (3.1%). Gross fixed capital formation was up by HUF 591 bn (by 53.9%) and intermediate consumption by HUF 266 bn (10.8%). Other expenditures increased by HUF 78.7 bn (2.3%). Meanwhile, interest expenditures of the general government sector fell by HUF 74.8 bn (a 6.5% decrease).

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• eximbank,
• KSH,
• economy,
• budget,
• general government debt