Ministry for National Economy

The state of the central sub-sector of the state budget in July 2013

August 7, 2013 4:08 PM

Key features of financial processes regarding the central sub-sector of the state budget in July 2013.

In the month of July 2013, the central sub-sector of the state budget registered a monthly deficit of HUF 129.5bn. Within that, the central state budget posted a deficit of HUF 179.1bn, while extra budgetary state funds and Social Security Funds registered surpluses of HUF 5.6bn and HUF 44bn, respectively.

Accordingly, the deficit of the central sub-sector of the state budget was HUF 851.2bn at the end of July 2013. The central sub-sector of the state budget had a deficit of HUF 437.5bn in the initial seven months of 2012.
When analyzing the budgets for 2012 and 2013, it must be taken into account that due to significant changes concerning certain types of taxes (revenue estimates regarding some types of taxes were reduced, certain taxes were abolished or modified, and some new taxes were introduced) it is impossible to compare the two periods without filtering out the distorting effects of these factors.

In addition to the aforementioned factors, this year’s revenues and expenditures at budgetary institutions are hugely influenced by the Government having taken over the management of local government institutions as of 1 July 2012 and 1 January 2013, as well as by the expenditure of non-profit health service companies from 1 April of this year.

Central government budget

Revenues

The revenues of the central government budget for the initial seven months of the year were some HUF 275bn higher in comparison to the same period of the previous year. The higher figure is primarily the consequence of delaying the payment of certain taxes – Value Added Tax, Registration Tax and stamp duty revenue – in 2012 and revenues from new taxes introduced this year, as well as of higher revenues at central budgetary institutions and chapter administered appropriations. In addition, payments related to state assets and other revenues were also up.

Expenditures

Expenditures of the central government budget in the initial seven months of the year were some HUF 826bn higher in comparison to the same period of last year, which is mainly attributable to more spending this year – due primarily to structural changes -- at budgetary institutions and chapter administered professional appropriations. (In the year 2013, the expenditures of healthcare, welfare and other institutions taken over by the state as well as those resulting from teachers’ wages paid in public education were booked as expenditures of the central government budget.) In addition, special and normative subsidies, the funding of public media services, housing subsidies, payments resulting from third-party guarantees and other expenditures were also higher compared to the corresponding period of the previous year.

Interest payment balance

Interest payments totaled HUF 715.6bn at the end of July 2013 and were thus HUF 40.4bn below the figure of the corresponding period of the previous year. Interest revenues totalled HUF 70.9bn which was HUF 7.1bn less than last year’s figure. Accordingly, net interest expenditures (HUF 644.8bn) as a whole were HUF 33.3bn more favourable in comparison to the figure of the same period of last year.

Social security funds

The HUF 180.0bn surplus at the end of July 2013 recorded at Social Security Funds originated from the surpluses of HUF 121.6bn and HUF 58.4bn at the Pension Fund and the Health Fund, respectively. At the end of July 2012, the compound deficit of the Funds amounted to HUF 19.0bn. A difference was primarily noticeable on the revenue side, as among others social contribution tax payments to the Pension Fund, health care contribution payments as well as fiscal subsidies and compensations to the Health Fund came in higher than in the previous year. From 2013, this latter entitlement also covers contributions related to the Job Protection Action Plan.

Extra budgetary state funds

The HUF 62.1bn surplus posted by extra budgetary state funds at the end of July was less favourable than in the same month of the previous year. Total revenues of the Funds were HUF 17.6bn lower, while expenditures were HUF 6.3bn higher in comparison to the same month of the previous year. Within revenues, those at the National Employment Fund – originating from training contributions -- were lower, in addition to which the Fund no longer receives revenues from social contribution tax this year. Among expenditures, those concerning the Start work programme of the National Employment Fund edged higher, in line with estimates, in addition to which expenditure was also realised to a greater extent this year by the Research and Technological Innovation Fund and the National Cultural Fund.
Key cash flow data of the central sub-sector of the state budget at the end of July 2013 are as follows: