In January and February 2014, the fiscal processes of the state budget were in line with the Government’s prior expectations. The central sub sector of the state budget posted a deficit of HUF 483.3bn in the initial two months of 2014.

The state budget posted a deficit of HUF 582bn, while Social Security Funds and extra budgetary state funds registered surpluses of HUF 64.9bn and HUF 33.8bn, respectively, in this period. In the initial two months of 2013, the deficit of the central sub sector of the state budget totalled HUF 339.5bn.

The difference between the fiscal position regarding the first two months of this year and last stemmed mainly from the discrepancy between the expenditures of central budgetary institutions, as well as the expenditures and revenues of chapter managed appropriations. The mismatch between the  expenditures of the two periods at issue originated on the one hand from the effect of teachers’ wage hike effective as of September 2013 and on the other from expenditures related to non-profit healthcare entities which operate as budgetary institutions since 1 April 2013.

Allocations for local governments were also significantly higher than those in the corresponding period of the previous year. These are partly due to the higher estimate of this year and partly from the higher amount of disbursements under net financing. (Compared to 5 percent in January 2013, the related figure in January 2014 was 12 percent.)

In comparison to the corresponding period of the previous year, the fiscal position of the central sub system of the budget was dented by an amount of HUF 68.1bn disbursed until the end of February 2014 for covering loan repayments within the framework of the debt consolidation of local governments. (This amount, however, boosts the balance of local governments.)

The cash-flow deficit was in line with expectations. It has to be noted though that monthly expenditure amounts are uneven this year: at the beginning of the year expenditures exceed the amount of revenues, also when compared to previous years.

(Ministry for National Economy)