Hungary posts surprise budget surplus in June

In a statement, the ministry said that the central budget closed with a surplus of HUF 27.4 billion in June this year, compared to a deficit of HUF 107.8 billion in June last year. The latest data shows a much better picture of public finances compared to last year and any year since 2000, as

a surplus has never previously been recorded in June.

The monthly cash balance was beefed up a lot thanks to the HUF 200 billion dividend income received by the budget, partly from Szerencsejáték Zrt and partly from Corvinus Zrt. Given this, the management discipline applied in the first quarter of this year is indeed questionable.

Since we do not know the details, we can only speculate that the dividend from Corvinus Zrt. could have been the dividend income from the airport, which was HUF 100 billion. The state is increasingly being forced to take dividends from its companies not only from profits but also from the profit and loss reserve, thus improving the budgetary position.

If the HUF 200 billion revenue item mentioned by the ministry were entirely extraordinary revenue and the monthly balance were corrected with this, we would have the largest deficit in four years on our hands.

In the first half of the year, 67% of the annual deficit target was met. While this is slightly better than in previous years, it is not something we should be overjoyed about given that the deficit goal was massively overshot in all cases.

In 2025, the deficit is expected to reach around 5% of GDP, higher than the accrual deficit target of 4.1%.

By the end of June, the central government sub-system had recorded a deficit of HUF 2,773.6 billion. This comprised a deficit of HUF 2,727.6 billion in the central budget, a surplus of HUF 72.9 billion in the extra-budgetary funds and a deficit of HUF 118.9 billion in the social security funds.

Compared to the same period last year, the central subsystem's tax and contribution revenue was 9.5% higher. This included a 12% increase in proceeds from consumption-related taxes.