The general government budget projections for January-April 2014 are in line with the revenue-expenditure schedule for this year. The central sub sector of the state budget in the initial four months of the year posted a deficit of HUF 951.1bn.

Within that, the central state budget registered a deficit of HUF 1031.5bn, while Social Security Funds and extra budgetary state funds recorded surpluses of HUF 44.8bn and HUF 35.6bn, respectively. The deficit of the central sub sector of the state budget totalled HUF 528.6bn in the period January-April 2013.

The difference between the fiscal position regarding the first four months of this year and last stemmed mainly from one-off factors which do not affect the cash-flow deficit for the entire year, accordingly, these do not jeopardize the deficit target.

First, in April 2014, expenditures related to the National Family and Welfare Fund, curative-preventive services of the Health Insurance Fund and central budgetary institutions were much higher than those of last year. The key reason for this is that due to the public holidays at the beginning of May the Hungarian Treasury had disbursed the amount covering family benefits and wages as early as the end of April ensuring that all those involved received wages and due payments at the usual time. The earlier disbursement of the wages of employees at central budgetary institutions and family benefits (family allowance, childcare fee, childcare benefit, maternity benefit) thus increased expenditures in April, while those in May will logically be lower.

Second, the mismatch between the  expenditures of the two periods at issue originated on the one hand also 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.

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 68.6bn disbursed until the end of April 2014 for covering loan repayments within the framework of the debt consolidation of local governments. This amount, however, boosts the balance of local governments.

Monthly expenditure and revenue amounts are uneven this year: at the beginning of the year the amount of expenditures exceeds that of revenues, also when compared to previous years. However, the ESA deficit target for the entire year remains unchanged at 2.9 percent of GDP.

(Ministry for National Economy)