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Country Report Hungary Product Image

Country Report Hungary

  • Published: March 2014
  • Region: Hungary
  • 27 Pages
  • The Economist Intelligence Unit

Hungary's state budget (excluding local governments) posted a Ft407.9bn ($1.8bn) cash-flow deficit in February, according to the Ministry for National Economy. The deficit thus reached Ft483.3bn in the first two months of 2014.

Due to the uneven timing of various revenues and expenses, the month of February often brings a large deficit of Ft300bn or more for Hungary's budget, but even so, this year's February deficit was more than Ft70bn larger than a year earlier, and was the second-largest February shortfall in the past decade. The two-month deficit amounted to 49% of the annual target-this is up from 36% a year ago, though otherwise not unusual for this time of year.

Rising central-budget expenditures-by Ft205bn, or 11%, in the first two months of 2014-were mainly responsible for the wider deficit. Operating expenses of budget institutions were Ft113.5bn higher in January-February than a year earlier, which the ministry explained as resulting from a pay rise for teachers and the taking-over of former local healthcare operators during the past year. However, two-month institutional expenditures amounted to 19.5% of the annual target, as opposed to the time-proportionate 16.7%, suggesting that at least some of the growth in spending was unplanned.

Country Report Hungary

State budget deficit widens to Ft408bn in February
Impact on the forecast

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