Country Report Hungary
- ID: 2101527
- August 2015
- Region: Hungary
- 27 Pages
- The Economist Intelligence Unit
The state budget (excluding local governments) recorded a Ft70.8bn (US$253m) deficit in July, made larger, as in previous months, by a delay in the disbursement of EU funds. However, fiscal performance remains broadly on track to meet the 2015 full-year target of 2.4% of GDP.
The July deficit took the deficit for the first seven months of 2015 to Ft894bn, compared with Ft851.4bn a year earlier. The deficit in January-July was the largest for a comparable period since 2011, and exceeded the 2015 full-year target by 0.2%. However, fiscal performance was better than in January-July 2014, when the deficit amounted to 103.1% of the annual target.
As in recent months, the July budget balance was adversely affected by a virtual halt in transfers from the EU, as the government and the European Commission were locked in a dispute over suspected irregularities in local tenders. In July transfer inflows from the EU, at Ft12bn, were 90% lower than a year earlier. Meanwhile, expenditure on EU-backed projects declined by only 14% year on year, as the government continued to press ahead with infrastructure projects, paying the EU's share as well. Officials at the Ministry of National Economy are confident that the dispute will be resolved before end-2015, resulting in sizeable inflows of delayed EU funds.