Economy 30 September 2022, 9:29am

Hungary budget was still okay in the first half of 2022

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The deficit of Hungary's general government sector in the first half of 2022 was HUF 893 billion, 2.8% of GDP, according to preliminary data published by the Central Statistical Office (KSH) on Friday. The balance improved by HUF 627 billion, or by 2.9 percentage points as a proportion of GDP compared to the same period of the previous year.

The general government sector’s revenues were HUF 13,324 billion and its expenditures HUF 14,217 billion.

Revenues increased by HUF 2,838 billion or by 27.1% yr/yr. The largest, HUF 873 billion (19.4%) increase in value was recorded in taxes on production, within it VAT revenues grew by HUF 664 billion (by 27.0%). Revenues from taxes on income surpassed by HUF 855 billion (57.5%) the previous year’s, mainly due to the accrual-based accounting of income tax refund to families with children. Social contributions increased by HUF 338 billion (by 12.1%). Other revenues grew by HUF 772 billion (by 46.0%).

The rise in VAT receipts in recent weeks occurred as a result of surging household consumption and much higher-than-expected inflation.

Expenditures increased by HUF 2,211 billion or by 18.4%. The growth in case of paid compensation of employees was HUF 535 billion (18.5%), regarding social benefits other than social transfers in kind it was HUF 503 billion (17.5%). Intermediate consumption went up by HUF 296 billion (by 14.5%) and interest expenditures increased by HUF 190 billion (by 31.8%). Gross fixed capital formation grew by HUF 84 billion (by 7.0%). Other general government sector expenditures went up by HUF 604 billion (by 25.2%).

Looking at the second quarter alone, we find that the general government sector had a deficit of HUF 371 billion, representing 2.3% of GDP. The balance was last this favourable before the coronavirus outbreak.

The balance improved by HUF 282 billion or by 2.5 percentage points compared to the previous year. Revenues increased by HUF 1,313 billion, by 24.1%. Expenditures were HUF 1,031 billion (16.9%) higher.