The general government budget balance in the first quarter of 2014 was in line with the Government’s prior expectations. The central sub sector of the state budget posted a deficit of HUF 701.2bn in the initial three months of 2014.

The state budget posted a deficit of HUF 796.1bn, while Social Security Funds and extra budgetary state funds registered surpluses of HUF 63.9bn and HUF 31bn, respectively, in this period. In the initial three months of 2013, the deficit of the central sub sector of the state budget totalled HUF 493.6bn.

The difference between the fiscal position regarding the first three 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. There is also a significant schedule gap between the accounting of revenues and expenditures related to EU programmes.

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. 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 68.2bn disbursed until the end of March 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 by a larger extent than in previous years.

(Ministry for National Economy)