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

In the month of May 2013, the central sub sector of the state budget registered a monthly deficit of 30.8bn HUF. Within that, the central state budget posted a deficit of 59.8bn HUF, while extra budgetary state funds and Social Security Funds registered surpluses of 6.1bn HUF and 22.9bn HUF, respectively.

Thus, the deficit of the central sub sector of the state budget was 559.4bn HUF at the end of May 2013. The central sub sector of the state budget had a deficit of 344.1bn HUF in the initial five months of 2012.

When analyzing the budgets for 2012 and 2013, it has to 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 structural changes as institutions of local governments were taken over as of 1 May 2012 and 1 January 2013.

Central government budget

Revenues

The revenues of the central government budget for the initial five months of the year were some 154bn HUF higher in comparison to the same period of the previous year. The higher figure has been the consequence, first, of delaying the payment of certain taxes in 2012 – especially of Value Added Tax – as well as revenues from new taxes introduced this year and, second, 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 five months of the year were almost 478bn HUF 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, 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, 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 500.2bn HUF at the end of May 2013 and were thus 39.2bn HUF below the figure of the corresponding period of the previous year. Interest revenues totaled 49.9bn HUF which was 4.1bn HUF less than last year’s figure. Thus net interest expenditures (450.3bn HUF), as a whole, were 35.1bn HUF more favourable in comparison to the figure of the same period of last year.

Social security funds

The 121.4bn HUF surplus at the end of May 2013 recorded at Social Security Funds originated from the surpluses of 70.6bn HUF and 50.8bn HUF at the Pension Fund and the Health Fund, respectively. At the end of May 2012, the compound deficit of the Funds amounted to 2.3bn HUF. The difference is primarily caused by revenue side change, 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. This latter entitlement will cover as of 2013 contributions related to the Job Protection Action Plan.

Extra budgetary state funds

The 47.1bn HUF surplus posted by extra budgetary state funds at the end of May was less favourable than in the same month of the previous year. Total revenues of the Funds were 11.3bn HUF lower, while expenditures were 3.4bn HUF 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, this year the Fund no longer receives revenues from social contribution tax. Among expenditures, those concerning the Start work programme of the National Employment Fund edged higher, in line with estimates.

Key cash flow data of the central sub sector of the state budget at the end of May 2013 are as follows:

(Ministry for National Economy)